Efficient frontier: Difference between revisions
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''Portfolio analysis''. | ''Portfolio analysis''. | ||
The efficient frontier represents portfolios which dominate all other possible portfolios by giving the maximum possible expected return, for the given variance of returns. | The efficient frontier represents portfolios which dominate all other possible portfolios by giving the maximum possible expected return, for the given variance of returns. | ||
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* [[Feasible set]] | * [[Feasible set]] | ||
* [[Inefficient portfolio]] | * [[Inefficient portfolio]] | ||
Revision as of 20:22, 13 August 2013
Portfolio analysis.
The efficient frontier represents portfolios which dominate all other possible portfolios by giving the maximum possible expected return, for the given variance of returns.
Therefore rational investors will always invest only in portfolios which lie on the efficient frontier.
