CFA Practice Question

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CFA Practice Question

For a portfolio to be efficient, it must exhibit the ______.

A. highest risk for a given level of expected return
B. highest expected return for a given level of risk
C. lowest risk for all levels of expected return
D. highest expected return for all levels of risk
Correct Answer: B

Efficient portfolios give the highest possible return for any given level of risk or, alternatively, the lowest possible risk for any given level of return.

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