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The question, "Is it appropriate for a 2-year-old to suck his thumb, but inappropriate for a 42-year-old to engage in the same behavior?" underlies the issue of
Mean-Variance Efficient Portfolio
An investment portfolio that aims for the highest expected return for a given level of risk or the lowest level of risk for a given expected return.
Single-Index Structure
A model used in finance that relates the returns of a stock to the returns of a market index through a single beta factor.
Covariances
A measure indicating the extent to which two variables change in tandem over time.
Well-Diversified Portfolio
A collection of investments that spans various assets to minimize risk while maximizing returns.
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