The optimal combination of securities that provides the greatest amount of return for each level of risk is known as:
A)The expected frontier
B)The economic frontier
C)The efficient frontier
D)None of the above

Question

Quizplus · Accepted Answer

The optimal combination of securities that provides the greatest amount of return for each level of risk is known as the efficient frontier. This concept is important in portfolio theory, as investors aim to construct portfolios that maximize returns while minimizing risk. The efficient frontier represents the set of portfolios that offer the highest expected return for a given level of risk or the lowest risk for a given level of expected return. Therefore, choice C - efficient frontier - is the correct answer.

The Optimal Combination of Securities That Provides the Greatest Amount