You are graphing the portfolio expected return against the portfolio standard deviation for a portfolio consisting of two securities. Which one of the following statements is correct regarding this graph?

Multiple Choice

• Risk-averse investors should select the portfolio with the lowest rate of return.

• All possible portfolios will graph as efficient portfolios.

• The minimum variance portfolio will have the lowest portfolio expected return of any of the possible portfolios.

• Some portfolios will be efficient while others will not.

• Risk-taking investors should select the minimum variance portfolio.