Question

What do you understand by efficient portfolio & efficient frontier?

Answer 1

An efficient portfolio is one that lies on theefficient frontier.An efficient portfolio provides the lowest level of risk possible for a given level of expected return. Portfolios that lie below the efficient frontier are sub-optimal, because they do not provide enough return for thelevel of risk.

Answer 2

Explanation:

An efficient portfolio is one that is well-diversified and adequately compensates you for risk.

When it comes to putting together an efficient investment portfolio, reducingvolatility is the name of the game.