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Basic Question 2 of 6

The measure of risk in an efficient frontier is ______.

A. specific risk
B. standard deviation of returns
C. beta
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User Contributed Comments 3

User Comment
danlan It is total risk not only beta
americade beta is only important to an individual portfolio to be added that would be considered to be added only if it had alpha, it's std dev could be diversified away to a point.
thekobe in the CML aproach is the std dev what matters, in the SML aproach is Beta
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Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

describe and interpret the minimum-variance and efficient frontiers of risky assets and the global minimum-variance portfolio

CFA® 2025 Level I Curriculum, Volume 2, Module 1.