The efficient frontier consists of (efficient) portfolios that have the maximum expected return for any given standard deviation. The efficient frontier starts at the global minimum-variance portfolio and continues above it on the minimum variance frontier. The minimum-variance frontier is the expected return-standard deviation combinations of the set of portfolios that have the minimum variance for every given level of expected return. Efficient portfolios can have capital allocation line (CAL) slopes less than 1.0. These slopes, however, will all be less than that of the CAL of the market portfolio (the capital market line). |
