Efficient portfolios of N risky securities are portfolios that
A) are formed with the securities that have the highest rates of return regardless of their standard deviations.
B) have the highest rates of return for a given level of risk.
C) are selected from those securities with the lowest standard deviations regardless of their returns.
D) have the highest risk and rates of return and the highest standard deviations.
E) have the lowest standard deviations and the lowest rates of return.

Question

Quizplus · Accepted Answer

Efficient portfolios are those that provide the highest return for a given level of risk, or equivalently, the lowest risk for a given level of return. This concept is a key component of modern portfolio theory.

Efficient Portfolios of N Risky Securities Are Portfolios That