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Efficient Frontier

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Efficient Frontier
A line created from the risk-reward graph, comprised of optimal portfolios.



Notes:
The optimal portfolios plotted along the curve have the highest expected return possible for the given amount of risk.


Efficient frontier
The combinations of securities portfolios that maximize expected return for any level of expected risk, or that minimizes expected risk for any level of expected return. Pioneered by Harry Markowitz.

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html), who, essentially, described a risk approach that involves using quantitative analysis and a varied portfolio such that there could be drawn a line on a graph that would define what he called "the efficient frontier.
The basic point of DEA is to identify the so-called efficient frontier in some comparison set of DMUs.
The efficient frontier is defined by a set structure for which it is not possible to lower the expected cost at the same level of variability, or lower variability at the same expected cost, or lower both expected cost and variability.
 
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