- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 52. Portfolio Risk and Return: Part I
- Subject 7. Optimal Portfolio

###
**CFA Practice Question**

An investor maximizes her utility by ______

A. finding the highest indifference curve under the risk-return tradeoff.

B. choosing a point that is tangent to the efficient frontier and is on the highest feasible indifference curve.

C. choosing a point that is parallel to the efficient frontier and is on the highest feasible utility curve.

**Explanation:**An investor invests along the efficient frontier and chooses a point that is also on the highest feasible indifference curve. This is a point of tangency between the two.

###
**User Contributed Comments**
2

User |
Comment |
---|---|

PedroEdmundo |
What the difference between indifference and utility curve? |

danlan |
They are the same. |