In a given a portfolio of stocks, what is the envelope curve containing the set of best possible combinations known as?
A) Efficient portfolio.
B) Utility curve.
C) Efficient frontier.
D) Last frontier.
E) Capital asset pricing model.

Question

Quizplus · Accepted Answer

The envelope curve containing the set of best possible combinations is known as the efficient frontier. It shows the maximum expected return for a given level of risk, or the minimum risk for a given level of return. A portfolio that lies on the efficient frontier is considered an efficient portfolio, as it provides the highest return for a given level of risk or the lowest risk for a given level of return. The other choices (A, B, D, E) are not directly related to the concept of efficient frontier.

In a Given a Portfolio of Stocks, What Is the Envelope