Inflection Point Significance for the Investment Size
17 Pages Posted: 11 Mar 2013
Date Written: February 27, 2013
Inflection points in the the function for determining estimated geometric gain with respect to capital committed emerge when planning an investment for a finite time horizon. These are points where marginal increases in reward with respect to risk peaks. We analyze the properties of inflection points for a mix of one risky asset and one risk-free asset and illustrate their practical implications with examples.
Keywords: risk analysis, growth portfolio, inflection point
JEL Classification: C52, G11
Suggested Citation: Suggested Citation