On the Endogeneity of the Mean-Variance Efficient Frontier


Publication: Journal of Economic Education

Volume: Volume 33, No. 4

Issue: Fall 2002

Pages: 357-366

Author(s): R. A. Somerville (Trinity College) and Paul G. J. O'Connell (FDO Partners, LLC)

Address (Principal Author):R. A. Somerville
Department of Economics
Trinity College
Dublin 2
IRELAND
Tel: (+353) 1 6081325
Fax: (+353) 1 6772503

Internet Address (Principal Author): rsomrvll@tcd.ie

Title: On the Endogeneity of the Mean-Variance Efficient Frontier

Abstract: The endogeneity of the efficient frontier in the mean-variance model of portfolio selection is commonly obscured in textbooks. The authors demonstrate this endogeneity, and discuss the impact of parameter changes on the mean-variance efficient frontier and on the beta coefficients of individual assets.

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