n NISM Certifications
X NISM Series X
Medium

A portfolio is considered efficient if:

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    No other portfolio offers higher expected returns at the same risk

  2. B

    No other portfolio offers lower risk for the same expected return

  3. C

    There is no portfolio with higher return

  4. Both A and B

    Correct answer

Why this is the answer

An efficient portfolio maximizes returns for a given risk or minimizes risk for a given return, lying on the efficient frontier.

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