All possible combinations of assets in a given portfolio will lie along the efficient frontier.

Question

Quizplus · Accepted Answer

The efficient frontier represents only those portfolios that provide the highest expected return for a given level of risk or the lowest risk for a given level of expected return. Not all possible combinations of assets will be efficient or lie on the efficient frontier; many will have suboptimal risk-return characteristics.

All Possible Combinations of Assets in a Given Portfolio Will