Mean-Variance Optimization
/ˈmiːn ˈvɛəriəns ˌɒptɪmaɪˈzeɪʃən/
Definitions
- (n.) A mathematical framework used in financial law and regulation to construct portfolios by optimizing expected returns against portfolio variance or risk, often applied in fiduciary duty contexts.
The trustee employed mean-variance optimization to balance risk and returns in managing the pension fund.
Forms
- mean-variance optimization
- mean-variance optimizations
Related terms
See also
Commentary
Primarily relevant in financial law and regulatory compliance where legal standards require prudent risk management; drafting should clarify the method's role in meeting fiduciary duties.
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