An efficient portfolio
A)has only unique risk.
B)provides the highest expected return for a given level of risk and provides the least risk for a given level of expected return.
C)has no risk at all.
D)provides the highest expected return for a given level of risk.

Question

Quizplus · Accepted Answer

An efficient portfolio is one that provides the highest expected return for a given level of risk and provides the least risk for a given level of expected return. It does not mean no risk and it does not necessarily have only unique risk. Therefore, the correct choice is B.

An Efficient Portfolio