What term refers to portfolios that offer the best return-risk combinations available to investors?

The term that refers to portfolios offering the best return-risk combinations available to investors is called efficient portfolios. This concept is grounded in modern portfolio theory, which advocates for the optimal allocation of assets to maximize returns while minimizing risk. Efficient portfolios lie on what is known as the efficient frontier, where no other portfolios can provide a higher expected return for the same level of risk, or a lower risk for the same level of return.

This principle is critical for investors looking to make informed decisions about their investment choices, as it highlights the balance that must be maintained between the potential for returns and the associated risks. Efficient portfolios allow investors to achieve their financial goals based on their individual risk tolerance and investment objectives. This understanding is essential for managing assets effectively in a competitive and often volatile market environment.