The portfolio on the minimum-variance frontier that maximizes the sharpe ratio is called

Question

Quizplus · Accepted Answer

The portfolio on the minimum-variance frontier that maximizes the sharpe ratio is known as the MVE (minimum variance efficient) portfolio. The efficient frontier refers to the set of portfolios on the minimum-variance frontier that offer the highest expected return for a given level of risk. The mean-variance frontier and mean standard deviation frontier are other terms used to describe the same concept as the efficient frontier. However, only the MVE portfolio specifically refers to the portfolio on the efficient frontier that maximizes the Sharpe ratio, which is a measure of risk-adjusted return.

The Portfolio on the Minimum-Variance Frontier That Maximizes the Sharpe