Question

Which of the following portfolio is considered inefficient?

Portfolio	Risk	Return
X	6.21%	7.05%
Y	8.97%	10.35%
Z	10.68%	12.00%

____

1. X
2. Y
3. Z
4. They are equally efficient

Answer 1

An Inefficient Portfolio means a prorfolio which gives returns lower in comparision to the risk taken.

in the given set of protfolios all of them have higher returns as risks goes high from Protfolio X to Portfolio Z. As the Risk increases to so does the returns also increase.

There is no such protfolio as mentioned which provides a higher return for the same degree of risk, or same returns at lower risk. Therefore None of the portfolios are Inefficient

The Correct Answer is D - they are equally efficient.