A Note on the Kinks at the Mean Variance Frontier

J. Vörös, J. Kriens, L.W.G. Strijbosch

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Abstract

In this paper the standard portfolio case with short sales restrictions is analyzed.Dybvig pointed out that if there is a kink at a risky portfolio on the efficient frontier, then the securities in this portfolio have equal expected return and the converse of this statement is false.For the existence of kinks at the efficient frontier the sufficient condition is given here and a new procedure is used to derive the efficient frontier, i.e. the characteristics of the mean variance frontier.
Original languageEnglish
Place of PublicationTilburg
PublisherDepartment of Econometrics and Operations Research
Number of pages7
Volume743
Publication statusPublished - 1997

Publication series

NameFEW Research Memorandum
Volume743

Keywords

  • portfolio investment
  • variance

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