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Risk-Free Rate
The expected yield from an investment that is considered free from the risk of financial loss, often exemplified by the returns on government bonds.
Optimal Risky Portfolio
A portfolio that offers the highest expected return for a given level of risk or the lowest risk for a given level of expected return.
Expected Return
The average return anticipated on an investment over a given period, accounting for the different rates of return and their probabilities.
Portfolio Variance
A measure of the dispersion of the returns of a portfolio, indicating the level of risk involved.
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