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What is a Markowitz efficient frontier?

The efficient frontier is represented with returns on the Y-axis and risk on the X-axis. The Markowitz efficient set highlights the diversification of assets in a portfolio, which lowers the portfolio's risk. Harry Markowitz (1927-2023), the Nobel Prize-winning economist, is considered a founder of MPT.

What is the Markowitz model?

In finance, the Markowitz model ─ put forward by Harry Markowitz in 1952 ─ is a portfolio optimization model; it assists in the selection of the most efficient portfolio by analyzing various possible portfolios of the given securities.

What is Markowitz efficient set?

The Markowitz efficient set is a mathematical concept introduced by Nobel Laureate Harry Markowitz in 1952 to represent the returns of a portfolio for given levels of risk. It is represented on a graph that charts portfolios or investments on a scale of return (y-axis) versus risk (x-axis).

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