n NISM Certifications
XXI NISM Series XXI-A
Medium

A portfolio is considered to be efficient if -

Practice question from NISM XXI A for PMS - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    No other portfolio offers lower risk with the same expected return

  2. B

    No other portfolio offers higher expected return with the same risk

  3. Both of the above

    Correct answer

  4. D

    There is no portfolio with a higher return

Why this is the answer

An efficient portfolio provides the best risk-return trade-off: either the highest return for a given risk or the lowest risk for a given return.

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