
- UID
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- 2011-5-25
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- 2012-9-12
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I understand it as:
A = actively managed portfolio (assume low number of stocks with positive or negative alpha). by itself, A is not efficient.
M = market portfolio
A+M = optimal risky portfolio
Combine A+M with risk free asset to get a portfolio that is more efficient than just M+risk free. |
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