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Planets go around the sun in elliptical orbits.The highly exaggerated diagram below shows a portion of such an orbit and the force on the planet at one position along that orbit.The planet is moving to the right.F|| and
Are the components of the force parallel (tangential) and perpendicular (normal) to the orbit.The work they do is W|| and
) At the position shown
Efficient Frontier
A graphical representation of the set of optimal portfolios that provides the best possible expected return for a given level of risk.
Capital Allocation Line
A graph showing all possible combinations of risk-free assets and a portfolio of risky assets, illustrating optimal portfolios based on expected return and risk.
Expected Rate of Return
The expected rate of return is the anticipated percentage increase or decrease in an investment over a specified time period.
Capital Allocation Line
A graph showing all possible combinations of risky and risk-free assets for an investor, representing different levels of expected risk and return.
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