The optimal portfolio on the efficient frontier for a given investor depends 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.
E) the investor's degree-of-risk tolerance and the coefficient, A, which is a measure of risk aversion.

Question

Quizplus · Accepted Answer

The optimal portfolio for an investor on the efficient frontier is determined by the investor's degree of risk tolerance and the coefficient of risk aversion (A). Both factors influence how much risk an investor is willing to take on for potential returns, guiding the selection of an appropriate portfolio from the efficient frontier.

The Optimal Portfolio on the Efficient Frontier for a Given