In the absence of a risk-free rate,what is the minimum variance portfolio?
A)It is always efficient.
B)It is never efficient.
C)It is usually efficient.
D)It is usually the optimal portfolio.

Question

Quizplus · Accepted Answer

The minimum variance portfolio is always considered efficient in the context of the efficient frontier in portfolio theory. This is because it offers the lowest level of volatility (risk) for a given level of expected return, making it an efficient choice in the absence of a risk-free rate.

In the Absence of a Risk-Free Rate,what Is the Minimum