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)the investor's degree-of-risk tolerance and the investor's required rate of return.

Question

Quizplus · Accepted Answer

The optimal portfolio on the efficient frontier is determined solely by the investor's required rate of return and the risk-return tradeoff of the available assets, and is independent of the investor's degree-of-risk tolerance or risk aversion. Therefore, the answer is only choice C.

The Optimal Portfolio on the Efficient Frontier for a Given