Markowitz efficient portfolio

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Markowitz efficient portfolio

Also called a mean-variance efficient portfolio, a portfolio that has the highest expected return at a given level of risk.

Markowitz Efficient Portfolio

In Markowitz Portfolio Theory, a portfolio with the highest level of return at a given level of risk. One who carries such a portfolio cannot further diversify to increase the expected rate of return without accepting a greater amount of risk. Likewise one cannot decrease his/her exposure to risk without proportionately decreasing the expected return. A Markowitz efficient portfolio is determined mathematically and plotted on a chart with risk as the x-axis and expected return as the y-axis. See also: Markowitz efficient set of portfolios, Homogeneous expectations assumption.

References in periodicals archive ?

Moreover, fixed income investments often are not actively traded and most lack the return histories necessary to construct Markowitz efficient portfolios. Finally, fixed income investments tend to be discrete, meaning that they come in prepackaged sizes that may be large and not as easily disaggregated and traded.

Portfolio diversification in concentrated bond and loan portfolios

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