Quote:
Originally Posted by DaKCMan AP
You somewhat answered your own question: the risk necessary to earn a greater expected return may be too high for an investor. That is why, with the other information you mentioned, one would find the efficient frontier and invest at the defined level of risk. I'm certain whatever class this is for they are building up to that analysis.
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Ugh efficient frontier is such a flawed concept. They finally dropped it from the CFA curriculum.
Not saying your wrong, just nitpicking about my least favorite part of portfolio management theory in modern finance.