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Nonsystematic Variance
The portion of an investment's variance that is due to factors specific to the individual investment, rather than factors affecting the entire market.
Market Index
A statistical measure that represents the overall performance of a selected set of stocks, designed to reflect the movements and trends of the market or a specific sector.
Active Portfolio
An investment portfolio managed with the intention to outperform the market by selecting and managing investments through active decision-making.
Treynor-Black Model
The Treynor-Black Model is a portfolio optimization method that combines actively selected securities with a passively managed market portfolio for better risk-adjusted returns.
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