Assume you are looking at an opportunity set representing many securities.Where would the minimum variance portfolio be located in relation to this set?
A)At the lowest point of the set
B)In the exact center of the set
C)At the far-right point of the set
D)At the far-left point of the set
E)At the highest point of the set

Question

Quizplus · Accepted Answer

The minimum variance portfolio is located at the far-left point of the opportunity set, representing the portfolio with the lowest possible risk (variance) for a given set of securities.

Assume You Are Looking at an Opportunity Set Representing Many