The optimal portfolio on the efficient frontier for a given investor depends on

A) the investor's degree-of-risk tolerance.
B) the coefficient, A, which is a measure of risk aversion.
C) the investor's required rate of return.
D) the investor's degree-of-risk tolerance and the investor's required rate of return.
E) the investor's degree-of-risk tolerance and the coefficient, A, which is a measure of risk aversion.

Efficient Frontier

A concept in modern portfolio theory representing the set of portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Risk Tolerance

The level of fluctuation in the returns on investments that an investor can tolerate.

Risk Aversion

A characteristic or trait describing investors who prefer lower returns with known risks rather than higher returns with unknown risks.