A portfolio is efficient if and only if ________ of every available security equals its ________.
A) the required return; expected return
B) the realized return; expected return
C) the expected return; required return
D) the required return; realized return

Question

Quizplus · Accepted Answer

An efficient portfolio is one that provides the highest expected return for a given level of risk or the lowest level of risk for a given expected return. This means that the portfolio is balanced in such a way that the expected return of each security is equal to the required return needed to justify its risk. Therefore, the correct choice is C.

A Portfolio Is Efficient If and Only If ________ of Every