The optimal portfolio on the efficient frontier for a given investor does not depend on
A)the investor's degree of risk tolerance.
B)the coefficient,A,which is a measure of risk aversion.
C)the investor's required rate of return.
D)A and C.
E)A and B.

Question

Quizplus · Accepted Answer

The optimal portfolio on the efficient frontier for a given investor is determined solely by the investor's required rate of return and the risk-return characteristics of the available assets, and does not depend on the investor's degree of risk tolerance or their measure of risk aversion. This is because the efficient frontier represents the set of portfolios that provide the highest expected return for a given level of risk, and the optimal portfolio for a given investor is simply the one that lies on the efficient frontier and provides the required rate of return. Therefore, the correct answer is C, as the optimal portfolio on the efficient frontier does not depend on the investor's degree of risk tolerance or their measure of risk aversion.

The Optimal Portfolio on the Efficient Frontier for a Given