Choose the portfolio from the following set that is on the efficient frontier.
A) Portfolio A: expected return of 10 percent; standard deviation of 8 percent
B) Portfolio B: expected return of 18 percent; standard deviation of 13 percent
C) Portfolio C: expected return of 38 percent; standard deviation of 38 percent
D) All of the above are on the efficient frontier.

Question

Quizplus · Accepted Answer

The efficient frontier represents portfolios that offer the highest expected return for a given level of risk or the lowest risk for a given level of expected return. Without comparing these portfolios to others outside this set, we cannot definitively say any of them are not on the efficient frontier. Each portfolio presents a different level of risk and return, and without additional context or options, they could all be considered as part of the efficient frontier in this limited set.

Choose the Portfolio from the Following Set That Is on the Efficient