Efficient because it offers the highest expected return.
Any portfolio chosen from the efficient set of portfolios.
Any portfolio chosen from the feasible set of portfolios.
Tangent to the investor’s highest indifference curve.Show Result

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Detailed Answer

Answer (D) is correct. An investor wants to maximize expected return and minimize risk when choosing a portfolio. A feasible portfolio that offers the highest expected return for a given risk or the least risk for a given expected return is an efficient portfolio. A portfolio that is selected from the efficient set of portfolios because it is tangent to the investor’s highest indifference curve is the optimal portfolio.