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What is mean variance model?

帮考网校2020-10-12 17:38:55
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The mean-variance model is a financial model used to determine the optimal portfolio of assets by balancing the expected return and the risk. It assumes that investors are rational and risk-averse, and seek to maximize returns while minimizing risk. The model calculates the expected return and variance (or standard deviation) of each asset, and combines them to create a portfolio that provides the highest expected return with the lowest possible risk. The model is widely used in portfolio management and asset allocation.
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