For the following efficient frontier,the expected return of the minimum variance portfolio is: A) 5.0%

Question

For the following efficient frontier,the expected return of the minimum variance portfolio is: 
A) <3.0% 
B) Between 3.0% and 4.0% 
C) Between 4.0% and 5.0% 
D) >5.0%

Quizplus · Accepted Answer

The minimum variance portfolio is located at the leftmost point on the efficient frontier, where the risk (measured by standard deviation) is minimized for a given level of expected return. From the graph, we can see that the minimum variance portfolio has an expected return of approximately 3.5%, which falls between 3.0% and 4.0%. Therefore, the best choice is B.

For the Following Efficient Frontier,the Expected Return of the Minimum