Efficient frontier

[ BACK ]

Financial glossary Financial glossary

The Efficient frontier is a curve comprised of points. Each point represents the best possible portfolio based on its particular risk and return profile.

Portfolios along the border are not all equal or equally beneficial. They are only rated as the most efficient.

Based on risk tolerance, the investor then chooses the desired the position at the Efficient frontier and accordingly selects a portfolio.

The Efficient frontier concept is closely related to the Markowitz model.

MoneyController also suggests