Question

How does efficient frontier analysis (EFA) differ from other forms of complex risk assessment techniques?

Answer 1

In organisations, for risk assessment you need three things:-

1.level of expected outcome.

2.Analysis of risk vs return.

3.level of portfolio.

An organisation may have any combination of assets, the Efficient Frontier analysis for any risk gives you the highest level of expected outcome.

Efficient Frontier analysis is different from other other forms of complex risk assessment techniques.It gives analysis of risk vs return at higher level of correctness on investment portfolio.

The financial values of the assets are considered as key to analysis.

The biggest advantage of efficient frontier analysis is that it's  result can be communicated and utilized with non mathermatical decision makers. Efficient frontier analysis reduces the complexity of risk by analysing it in smooth manner.

DON'T FORGET TO LIKE.

THANKS BY HEART.