Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? $\begin{array}{ccc}
\text { Portfolio } & \text { Expected Return } & \text { Standard Deviation } \
\text { A } & 10\% & 12\% \
\mathrm{B} & 5\%& 7\% \
\mathrm{C} & 15\% & 20\% \
\mathrm{D} & 12\% & 25 \%
\end{array}$

A) Only portfolio A cannot lie on the efficient frontier.
B) Only portfolio B cannot lie on the efficient frontier.
C) Only portfolio C cannot lie on the efficient frontier.
D) Only portfolio D cannot lie on the efficient frontier.
E) Cannot be determined from the information given.

Question

Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? $\begin{array}{ccc}
\text { Portfolio } & \text { Expected Return } & \text { Standard Deviation } \
\text { A } & 10\% & 12\% \
\mathrm{B} & 5\%& 7\% \
\mathrm{C} & 15\% & 20\% \
\mathrm{D} & 12\% & 25 \%
\end{array}$

A) Only portfolio A cannot lie on the efficient frontier.
B) Only portfolio B cannot lie on the efficient frontier.
C) Only portfolio C cannot lie on the efficient frontier.
D) Only portfolio D cannot lie on the efficient frontier.
E) Cannot be determined from the information given.

Quizplus · Accepted Answer

Portfolio D cannot lie on the efficient frontier because it has a higher standard deviation (risk) than Portfolio C but a lower expected return, making it inefficient compared to the other portfolios listed. Efficient frontier portfolios offer the best possible expected return for a given level of risk or the lowest risk for a given level of expected return.

Which One of the Following Portfolios Cannot Lie on the Efficient