Question

An efficient frontier is:

		A combination of securities that lie below the minimum variance portfolio and above the maximum return portfolio
		A combination of securities that have some expected return for each level of risk
		The envelope curve of all portfolios that lie between the minimum variance portfolio and the maximum return portfolio
		The combination of securities of portfolios represented as a convex function
		A combination of securities that lie below the minimum variance portfolio and the maximum return portfolio

Answer 1

Efficient frontier

An efficient frontier is A combination of securities that have some expected return for each level of risk. It is the set of optimal portfolios that offers the highest expected return for a definite level of risk or the lowest risk for a given level of expected return. It is also known as the portfolio frontier, which satisfy the condition that no other portfolio exists with a higher expected return but with the same standard deviation of return.