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What is Mean Variance?

Mean Variance An analytical framework that evaluates portfolios by calculating expected return (mean) and risk (variance), fundamental to Modern Portfolio Theory.

Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework

How is “Mean Variance” Used in Practice?

Mean variance analysis provides the mathematical foundation for optimizing portfolios based on expected risk and return.

Certification Exam Relevance

CFAACCAFRM

Who Needs to Know This Term?

  • Financial Analysts
  • Bankers
  • Traders

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Frequently Asked Questions

What is Mean Variance?

An analytical framework that evaluates portfolios by calculating expected return (mean) and risk (variance), fundamental to Modern Portfolio Theory.

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