CMT Association CMT Level II Exam CMT-Level-II Question # 20 Topic 3 Discussion

CMT Association CMT Level II Exam CMT-Level-II Question # 20 Topic 3 Discussion

CMT-Level-II Exam Topic 3 Question 20 Discussion:
Question #: 20
Topic #: 3

Which of the following is true of the Efficient Frontier concept in modern portfolio theory?


A.

It centers on the premise that systemic risks in the financial markets can be diversified away.


B.

It is a 45 degree line plotting possible risk versus return


C.

It is a plot of the highest possible returns obtainable over a series of risk levels


D.

It is unrelated to the risk free rate


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