With the help of a diagram between an efficient portfolio and an optimum portfolio

While an efficient portfolio is the portfolio with the highest unit of return per given level of risk on optimum portfolio is that portfolio that is both efficient and suits the investors risk preferences.

While the portfolio Q is efficient it may not be considered optimum for an investor whose utility is defined curve P optimum portfolio is at the point where the efficient frontier is tangent to the indifference curve.

(Visited 512 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published.