Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? $$\begin{array}{l}
\begin{array} { r r r }
\text { Portfolio }&\text{Expected Return }& \text { Standard Deviation } \
\hline\mathrm { W } & 9 \% & 21 \% \
\mathrm { X } & 5 \% & 7 \% \
\mathrm { Y } & 15 \% & 36 \% \
\mathrm { Z } & 12 \% & 15 \%
\end{array}
\end{array}$$
A) Only portfolio W cannot lie on the efficient frontier.
B) Only portfolio X cannot lie on the efficient frontier.
C) Only portfolio Y cannot lie on the efficient frontier.
D) Only portfolio Z cannot lie on the efficient frontier.
E) Cannot tell from the information given.

Question

Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? $$\begin{array}{l}
\begin{array} { r r r } 
\text { Portfolio }&\text{Expected Return }&   \text { Standard Deviation } \
\hline\mathrm { W } & 9 \% & 21 \% \
\mathrm { X } & 5 \% & 7 \% \
\mathrm { Y } & 15 \% & 36 \% \
\mathrm { Z } & 12 \% & 15 \%
\end{array}
\end{array}$$
A) Only portfolio W cannot lie on the efficient frontier.
B) Only portfolio X cannot lie on the efficient frontier.
C) Only portfolio Y cannot lie on the efficient frontier.
D) Only portfolio Z cannot lie on the efficient frontier.
E) Cannot tell from the information given.

Quizplus · Accepted Answer

Portfolio W has a higher expected return and a higher standard deviation than portfolio Z. Therefore, portfolio W cannot lie on the efficient frontier.

Which One of the Following Portfolios Cannot Lie on the Efficient