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NEW QUESTION: 1
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%.
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.