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Federal Reserve Is Set to Cut Interest Rates Multiple Times - Bloomberg
Federal Reserve Is Set to Cut Interest Rates Multiple Times - Bloomberg
Understanding the Efficient Frontier of Investing.
What is Efficient Frontier? The efficient frontier is the set of optimal portfolios that offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return. Portfolios that lie below the efficient frontier are sub-optimal because they do not provide enough return for the level of risk. Portfolios that cluster to the right of the efficient frontier are sub-optimal because they have a higher level of risk for the defined rate of return. https://www.investopedia.com/terms/e/efficientfrontier.asp Understanding Efficient Frontier The efficient frontier rates portfolios (investments) on a scale of return (y-axis) versus risk (x-axis). Compound Annual Growth Rate ( CAGR ) of an investment is commonly used as the return component while standard deviation (annualized) depicts the risk metric. The efficient frontier theory was introduced by Nobel Laureate Harry Markowitz in 1952 and is a cornerstone of modern portfolio theory (MPT).