Selection of the ________ portfolio involves the combination of the _____ set and the investor's ___________ .
A) feasible, efficient, indifference curves
B) optimal, efficient, feasible set
C) optimal, efficient, indifference curves
D) optimal, feasible, indifference curves

Question

Quizplus · Accepted Answer

Optimal portfolio selection involves choosing the portfolio that lies on the efficient frontier (efficient set), given the investor's preferences (indifference curves). The feasible set refers to the set of all possible portfolios. Therefore, option A is incorrect. Option B is incorrect because the order should be optimal, efficient, and then feasible. Option D is incorrect because it does not take into account investor preferences.

Selection of the ________ Portfolio Involves the Combination of the _____

Selection of the ____ Portfolio Involves the Combination of the _