An eﬃcient set of portfolios is:
A)the complete opportunity set.
B)the portion of the opportunity set below the minimum variance portfolio.
C)only the minimum variance portfolio.
D)the dominant portion of the opportunity set.
E)only the maximum return portfolio.

Question

Quizplus · Accepted Answer

An efficient set of portfolios, also known as the efficient frontier, represents the dominant portion of the opportunity set. These portfolios offer the highest expected return for a given level of risk or the lowest risk for a given level of expected return.

An Eﬃcient Set of Portfolios Is