An efficient portfolio
1. maximizes risk for a given return
2. minimizes risk for a given return
3. maximizes return for a given level of risk
4. minimizes return for a given level of risk
A)1 and 3
B)1 and 4
C)2 and 3
D)2 and 4

Question

Quizplus · Accepted Answer

An efficient portfolio is designed to achieve the best possible return for a given level of risk, or equivalently, to minimize risk for a given level of return. This aligns with choices 2 and 3.

An Efficient Portfolio 1. Maximizes Risk for a Given Return