Question
In: Finance
Which of the following portfolios would be off the efficient frontier? Expected Return Risk Portfolio A...
Which of the following portfolios would be off the efficient frontier?
Expected Return Risk
Portfolio A 13% (er)17% (risk)
Portfolio B 12 (er) 18 (risk)
Portfolio C 18 (er) 30 (risk)
Solutions
Expert Solution
Answer:
Correct answer is:
Portfolio B 12 (er) 18 (risk)
Explanation:
Portfolio B has risk of 18% which is higher than risk of portfolio A; hence it cannot have expected return lower than expected return of portfolio A. Hence portfolio B would be off the efficient frontier.
Hence option B is correct and other options A and C are incorrect.
jeff jeffy answered 1 year agoRelated Solutions
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