If the return increases as more global investments with low correlation are added to the market portfolio, the efficient frontier moves
A) up and right.
B) up and left.
C) down and right.
D) down and left.
E) up only.

Question

Quizplus · Accepted Answer

Adding global investments with low correlation to a market portfolio increases diversification, which can enhance returns for a given level of risk or reduce risk for a given level of return. This causes the efficient frontier to move up (higher return) and to the left (lower risk).

If the Return Increases as More Global Investments with Low