The efficient frontier represents:a) The set of investments with the lowest riskb) The set of investments with the highest returnc) The set of portfolios offering the highest return for a given level ofriskd) The set of portfolios offering the lowest return for a given level ofrisk

The question pertains to the definition of the efficient frontier. The efficient frontier theory was…

Answered: The efficient frontier represents: a)…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 1Q

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Similar questions

An efficient portfolio is one that: Select one: a. maximises return for a given level of risk. b. maximises risk for a given level of return. c. minimises risk for a given rate of return. d. Both A and C. are efficient portfolios.
The amount invested is one of the required inputs in a portfolio optimization model. True or False
a. What are the expected return and standard deviation of your client's portfolio?
In the context of the Capital Asset Pricing Model (CAPM), the relevant measure of risk is A. standard deviation of returns. B. beta. C. variance of returns. D. unique risk.
A plot/graph of the positive relation between systematic risk and expected return is called: O security market line standard deviation and width of the normal distribution O covariance graph O capital asset pricing model
The security market line describes the expected return for O The efficient portfolio O The inefficient portfolio O All portfolios and assets O The efficient and inefficient portfolios
Which of the following portfolios achieves the highest Sharpe ratio? (check all that applies) Any portfolio created with a combination of mvp and risk free rate Any portfolio created with a combination of tangency portfolio and risk free rate Any portfolio created with a combination of mvp and tangency portfolio
Given the capital allocation line, an investor's optimal complete portfolio is the portfolio that A) maximizes expected return B) minimizes standard deviation risk C) maximizes both risk and return D) maximizes expected utility
Capital asset pricing theory asserts that portfolio returns are best explained by:a. Economic factors.b. Specific risk.c. Systematic risk.d. Diversification.
Beta is which of the following: A) standard deviation. B) total risk. C) Beta is the relationship which is between an investment's return, and the market return. D) unsystematic risk.
Which are the different assets that have the potential to be combined efficiently in a portfolio that will provide an optimal risk-return relationship for investors?
Explain the difference between (a) stand-alone risk and (b) risk in a portfolio context. How are they measured or calculated, and are they relevant to investors?

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The efficient frontier represents: a) The set of investments with the lowest risk b) The set of investments with the highest return c) The set of portfolios offering the highest return for a given level of risk d) The set of portfolios offering the lowest return for a given level of risk