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Well-Diversified Portfolio
A portfolio that contains a wide variety of investments across multiple asset classes to reduce risk.
Variance of Returns
A statistical measure that captures the dispersion or spread of an asset's returns around its mean or average return.
Arbitrage Opportunity
The opportunity to purchase a financial instrument at a reduced cost in one marketplace and sell it at an elevated price in a different marketplace to capitalize on the discrepancy between the two prices.
Risk-Free Rate
The theoretical return on an investment with zero risk, often represented by the yield on government securities such as U.S. Treasury bills.
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