Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? $$\begin{array} { c c c }
\underline{\text { Portfolio } }&\underline{ \text { Expected Return} } &\underline{ \text { Standard Deviation }} \
\text { A } & 10 \% & 12 \% \
\text { B } & 5 \% & 7 \% \
\text { C } & 15 \% & 20 \% \
\text { D } & 12 \% & 25 \%
\end{array}$$
A)Only portfolio A cannot lie on the efficient frontier.
B)Only portfolio B cannot lie on the efficient frontier.
C)Only portfolio C cannot lie on the efficient frontier.
D)Only portfolio D 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? $$\begin{array} { c c c } 
\underline{\text { Portfolio } }&\underline{ \text { Expected Return} } &\underline{ \text { Standard Deviation }} \
 \text { A } & 10 \% & 12 \% \
\text { B } & 5 \% & 7 \% \
\text { C } & 15 \% & 20 \% \
\text { D } & 12 \% & 25 \%
\end{array}$$
A)Only portfolio A cannot lie on the efficient frontier.
B)Only portfolio B cannot lie on the efficient frontier.
C)Only portfolio C cannot lie on the efficient frontier.
D)Only portfolio D cannot lie on the efficient frontier.
E)Cannot tell from the information given.

Quizplus · Accepted Answer

Portfolio D has a higher standard deviation (risk) than Portfolio C but offers a lower expected return, making it inefficient compared to C.

Which One of the Following Portfolios Cannot Lie on the Efficient