An Efficient Portfolio Is One That

question 65

Multiple Choice

An efficient portfolio is one that

• A) maximizes risk for a given level of return.
• B) maximizes return at all risk levels.
• C) maximizes return for a given level of risk.
• D) minimizes return for a given level of risk.

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Definitions:

Utility Function

A mathematical representation that captures the preference ranking of various bundles of goods by an individual, translating these preferences into a level of utility or satisfaction.

Income

Refers to the money received, typically on a regular basis, for work or through investments.

Price

The amount of money required to purchase a good or service.

Price

The amount of money required to purchase a good or service, often determined by factors like demand, supply, and market competition.