Efficient frontier a Consists of only those portfolios of risky assets that give the highest possible return for a given level of risk a Dominance principle Each investor will try to hold a portfolio on the efficient frontier a Personal preference Will determine where on the frontierEfficient Frontier ◼ Consists of only those portfolios of risky assets that give the highest possible return for a given level of risk. ◼ Dominance principle. ◼ Each investor will try to hold a portfolio on the efficient frontier. ◼ Personal preference will determine where on the frontier