00:01
So here we're talking about the efficient frontier in portfolio theory, right? and the efficient frontier is thinking about the trade -off between risk and return, right? ultimately, that is what we're thinking about.
00:20
And so we are in particular thinking about which portfolios are reasonable best options for investors, right, depending on their risk return goals or preferences, right? right.
00:57
So the efficient frontier is thinking about all the portfolios which are efficient in terms of which might be interesting, right, which you should plausibly consider.
01:10
So a lot of these can be ruled out immediately.
01:15
But this doesn't match up really well with the answers, right? and so the way that i would illustrate this is thinking about drawing it, right? when we plot portfolios in terms of risk and expected return, we usually get a function that looks sort of like this, with some minimum variance, right? this would be my minimum variance.
01:39
The idea here is that these portfolios are inefficient, right? you can do better...