Minimum-Variance Frontier

CFA Level II Portfolio Management
#1

Is Minimum-Variance Frontier typically have the convexed portion (negative slope; low expected return and high risk) part? Thanks.

#2

Yes.

#3

Thanks, but it relly hard to imagine where it comes from. More risk, less return… Even it’s minimum-variance forntier.

#4

Hence, its only called minimum variance forntier (and not efficient forntier)

if you take global minimum variance portfolio and upper right portion if it, thats minimum variance with maximum return portion of minimum variance frontier and hence that portion is called efficient frontier.

#5

The efficient frontier is the upper portion of the minimum variance frontier. Maximum return for a given level of risk (in addition to minimum risk for a given level of return).