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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 2 years ago
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