The optimal trade-off between risk and return for a given portfolio problem can be summarized by the
A) efficient frontier.
B) investment frontier.
C) portfolio boundary.
D) variance boundary.

Question

Quizplus · Accepted Answer

The efficient frontier represents the set of portfolios that offer the highest expected return for a given level of risk (or equivalently, the lowest risk for a given level of expected return). Therefore, it provides a way to determine the optimal trade-off between risk and return for a given portfolio problem. The other answer choices are not commonly used terms in portfolio theory.

The Optimal Trade-Off Between Risk and Return for a Given