The investor's portfolio should always be on the efficient frontier.

Question

Quizplus · Accepted Answer

The efficient frontier represents a combination of assets that maximizes expected return for a given level of risk, or minimizes risk for a given level of expected return. Therefore, the investor's portfolio should always be on the efficient frontier to obtain the maximum expected return for a given level of risk or the minimum risk for a given level of expected return.

The Investor's Portfolio Should Always Be on the Efficient Frontier