A(n) __________ portfolio offers the lowest risk for a given level of return or it generates the highest possible return for a given level of risk
A) Diversified
B) Market
C) Efficient
D) Stock
E) Opportunity

Question

Quizplus · Accepted Answer

An efficient portfolio is one that offers the highest returns for a given level of risk or the lowest risk for a given level of return. This means that it is optimized to provide the best possible risk-return tradeoff, and is therefore the most desirable type of portfolio to have. Diversified and market portfolios are not necessarily efficient, as they may contain assets that do not contribute to the optimal risk-return tradeoff. Stock and opportunity portfolios are too specific to be considered the lowest risk or highest return options for a given level of risk.

A(n) __________ Portfolio Offers the Lowest Risk for a Given