For the following efficient frontier, the standard deviation of the minimum variance portfolio is:
A)

Question

For the following efficient frontier, the standard deviation of the minimum variance portfolio is: 
A)<2.5% 
B)Between 2.5% and 3.5% 
C)Between 3.5% and 4.5% 
D)5.0%

Quizplus · Accepted Answer

The minimum variance portfolio is the portfolio on the efficient frontier with the lowest possible standard deviation. From the given efficient frontier, we can see that the standard deviation of the minimum variance portfolio is between 2.5% and 3.5%. Therefore, the best choice is B.

For the Following Efficient Frontier, the Standard Deviation of the Minimum