Efficient frontier
InvestingDefinition
Set of portfolios with the highest expected return for each level of risk. Plotted in mean-variance space, it's a curve bowing up and to the left.
Portfolios below the frontier are sub-optimal — you can earn the same return at lower risk, or higher return at the same risk. Foundational concept in Modern Portfolio Theory.
Portfolios below the frontier are sub-optimal — you can earn the same return at lower risk, or higher return at the same risk. Foundational concept in Modern Portfolio Theory.