efficient frontier model
[ɪˈfɪʃənt ˈfrʌntɪər ˈmɑːdəl]
nounpl: efficient frontier models
modelo de fronteira eficiente
1. A financial investment concept representing the set of optimal portfolios that offer the highest expected return for a given level of risk, or the lowest risk for a given level of expected return.
The efficient frontier model helps investors identify the best allocation of assets to maximize returns while minimizing risk.
O modelo de fronteira eficiente ajuda os investidores a identificar a melhor alocação de ativos para maximizar retornos enquanto minimiza riscos.
2. A graphical representation developed by Harry Markowitz in Modern Portfolio Theory showing the relationship between portfolio risk and return.
Points on the efficient frontier model represent portfolios where no additional return can be gained without accepting more risk.
Pontos na fronteira eficiente representam carteiras onde nenhum retorno adicional pode ser obtido sem aceitar mais risco.
The efficient frontier model is a cornerstone of Modern Portfolio Theory and is heavily taught in Brazilian and Portuguese business schools and finance programs. It represents a fundamental shift in how investors approach portfolio management, emphasizing the scientific approach to risk and return optimization. The concept is equally important in both Brazilian and North American financial markets.
Related Idioms & Phrases
on the efficient frontier
maximize return on the frontier
optimal risk-return tradeoff
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