A(n)________ portfolio maximizes return for a given level of risk.
A)efficient
B)risk-free
C)risk-neutral
D)risk-indifferent

Question

Quizplus · Accepted Answer

An efficient portfolio is one that provides the maximum possible return for a given level of risk. It is considered efficient because there is no way to achieve a higher return without taking on more risk, or to reduce risk without sacrificing some return. A risk-free portfolio would not have any risk and therefore would not be maximizing return for a given level of risk. Risk-neutral and risk-indifferent portfolios are not commonly used terms in finance.

A(n)________ Portfolio Maximizes Return for a Given Level of Risk