Question

The efficient frontier of risky assets is A. the portion of the investment opportunity set that lies above the global minimum variance portfolio. B. the portion of the investment opportunity set that represents the highest standard deviations. C. the portion of the investment opportunity set which includes the portfolios with the lowest standard deviation. D. the set of portfolios that

Answer 1

C. The portion of the investment opportunity set which includes the portfolios with the lowest standard deviation.

Step-by-step explanation:

Standard deviation is the criterion used in measuring risky assets. Harry Markowitz proposed the Efficient Frontier in the year 1952. Through a graph, portfolios which have the highest potential for returns can be depicted.

For securities to be considered worthy, their standard deviation ought to be lower than the standard deviation of individual securities. When a portfolio measures up to this criterion, then it can be represented on the efficient frontier.