The northwest boundary of the set of all portfolios is
A) the portfolio that maximizes return.
B) the efficient set.
C) the efficient portfolio.
D) the portfolio that minimizes risk.

Question

Quizplus · Accepted Answer

The efficient set represents the boundary of the set of all portfolios that provide the best possible return for a given level of risk, and thus represents the furthest northwest point on the graph of portfolios. The other options do not necessarily represent the boundary of the set.

The Northwest Boundary of the Set of All Portfolios Is