GAQM ISO-ITSM-001 Q&A - in .pdf

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  • Exam Code: ISO-ITSM-001
  • Exam Name: ISO 20000 - ITSM Certificate
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Which portfolio is off of the Markowitz efficient frontier based on the dominance principle?
A. Portfolio B with an expected return of 15% and a standard deviation of 21%.
B. Portfolio A with an expected return of 8% and a standard deviation of 10%.
C. Portfolio C with an expected return of 16% and a standard deviation of 20%.
Answer: A
A is at the extreme ends of the efficient frontier and is a variable choice. C is clearly superior to B because it has both a higher expected return and a lower risk. Thus, B cannot be on the efficient frontier.

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