The efficient set of portfolios is ______________.
A)A subset of minimum variance portfolios offering the highest return for each level of risk
B)A subset of minimum variance portfolios offering the lowest level of risk for each level of return
C)A subset of minimum variance portfolios offering the lowest return for each level of risk
D)A subset of minimum variance portfolios offering the highest level of risk for each level of return

Question

Quizplus · Accepted Answer

The efficient set of portfolios consists of portfolios that offer the highest return for each level of risk, and it is a subset of minimum variance portfolios. Option A correctly describes the efficient set. Option B describes the minimum variance frontier, which is different from the efficient set. Option C and D are also incorrect descriptions of the efficient set.

The Efficient Set of Portfolios Is ______________