Optimal portfolio(redirected from Optimal Portfolios)
An efficient portfolio most preferred by an investor because its risk/reward characteristics approximate the investor's utility function. A portfolio that maximizes an investor's preferences with respect to return and risk.
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A Markowitz efficient portfolio that best fits one's personal risk preference. A Markowitz efficient portfolio is the portfolio that has the highest possible potential return at a given level of risk. Thus, an optimal portfolio is the portfolio that considers the investor's own greed and/or how risk averse he/she is. A key difference between a Markowitz efficient portfolio and an optimal portfolio is the fact that, while a Markowitz efficient portfolio can be determined mathematically, an optimal portfolio is subjective.
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