The optimal portfolio is identified at the point of tangency between the efficient frontier and the
A) highest possible utility curve.
B) lowest possible utility curve.
C) middle range utility curve.
D) steepest utility curve.
E) flattest utility curve.

Question

Quizplus · Accepted Answer

The tangency between the efficient frontier and the highest possible utility curve identifies the optimal portfolio, as it maximizes the investor's utility given the available set of investment options.

The Optimal Portfolio Is Identified at the Point of Tangency