[amp_mcq option1=”lowest risk” option2=”highest risk” option3=”highest utility” option4=”least investment” correct=”option3″]<\/p>\n
The correct answer is: C. highest utility<\/strong>.<\/p>\n A portfolio’s utility is a measure of its desirability to an investor. It is a function of the portfolio’s expected return and risk. The optimal portfolio is the one that maximizes the investor’s utility.<\/p>\n A portfolio with the lowest risk is not necessarily the optimal portfolio. An investor may be willing to accept a higher level of risk in order to achieve a higher expected return.<\/p>\n A portfolio with the highest risk is not necessarily the optimal portfolio either. An investor may be unwilling to accept a high level of risk, even if it means a higher expected return.<\/p>\n The optimal portfolio is the one that strikes the right balance between risk and return for the investor. It is the portfolio that maximizes the investor’s utility.<\/p>\n Here is a brief explanation of each option:<\/p>\n [amp_mcq option1=”lowest risk” option2=”highest risk” option3=”highest utility” option4=”least investment” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-51653","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n\n