When considering the efficient frontier, financial managers should adhere to all of the following guidelines except:

Question

Quizplus · Accepted Answer

Adhering to guideline B would not necessarily result in maximizing return for a given level of risk or minimizing risk for a given level of return. It may lead to selecting a project with higher return but also higher risk, which may not be optimal for the company's risk profile. The other guidelines would generally help in achieving the efficient frontier.

When Considering the Efficient Frontier, Financial Managers Should Adhere to All