CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Investors seeking the highest possible return-to-risk tradeoff will hold the ______.

A. lowest-risk portfolio possible
B. efficient portfolio with the highest return
C. efficient portfolio with the lowest return
Correct Answer: A

The return-to-risk tradeoff is represented by the slope of the efficient frontier and is different for each point. At the minimum-risk point, the slope of the efficient frontier is infinite. Moving up the efficient frontier reduces the return-to-risk tradeoff.

User Contributed Comments 8

User Comment
aartis Highest risk return trade off - Lowest risk portfolio
achu Good question.
Vadik Yeah, Good one
ravdo suuuuuch a good question!!!
BigJimStud Excellent question.
Allen88 muy bueno question!
endurance estrema domanda eccellente !!
Shaan23 Whats odd. When you read in depth this answer seems it should include A as well

In the text it says the efficient frontier is the line above the Global minumum variance portfolio(Just the top half of the efficient curve)

by that definition that would include answer A(where the E(retun) is minimum
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