From the concept of an "efficient frontier," the point on a frontier that is optimal for all firms:
A) is the top point.
B) is the point closest to the vertical axis.
C) is the point half way between the two end points.
D) cannot be determined since firms vary in their willingness to accept risk.

Question

Quizplus · Accepted Answer

The efficient frontier represents a set of optimal portfolios that offer the highest expected return for a defined level of risk. The optimal point on the frontier varies for each firm based on their individual risk tolerance, so it cannot be universally determined.

From the Concept of an "Efficient Frontier," the Point on a Frontier