Efficient frontier analysis: Difference between revisions
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(called [[yield]]) expected from various available issues of financial paper (stocks, bonds etc.) | (called [[yield]]) expected from various available issues of financial paper (stocks, bonds etc.) | ||
In the textbook example, it is assumed that investors wish to minimize beta (i.e. risk) and maximize yield. | In the textbook example, it is assumed that investors wish to minimize beta (i.e. risk) and maximize yield. | ||
In such textbooks, beta is the abscissa (horizontal axis) and yield is the ordinate. ''This contrasts with the [[risk as regret]] style of analysis which relies on EFA only to average various mutually exclusive [[comprehensive outcome]]s modelled as scenarios - in that method, [[upside]] and [[downside]] are asymmetrical, as in [[behavioural finance]].'' | In such textbooks, beta is the abscissa (horizontal axis) and yield is the ordinate. ''This contrasts with the [[risk as regret]] style of analysis which relies on EFA only to average various mutually exclusive [[comprehensive outcome]]s modelled as scenarios - in that method, [[upside]] and [[downside]] are asymmetrical, as in [[behavioural finance]], whereas in strict EFA they are always symmetrical.'' | ||
== algorithm == | == algorithm == | ||