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The efficient frontier considers all of the alternative portfolios that can be constructed from a set of investment proposals. The frontier is made up of the best possible investments in the least-cost portfolios. The goal in optimizing your portfolio using the efficient frontier is finding the portfolio with more benefit for not much more cost.
The efficient frontier is drawn as a chart of points (candidate scenarios) with the current scenario budgeted cost as a vertical line of reference. The y-axis values shown on the graph are based on the optimization attributes you set on the scenario optimizations page. If you define the budgeted benefit as the only optimization attribute, the y-axis value is the budgeted benefit.
When graphed for cost (x-axis) and benefit (y-axis), the efficient frontier forms a curve that starts at the origin, rises steeply, and then flattens. The efficient frontier is always curved, never straight. The points that lie on the curve are the best set of all portfolios that could exist for every theoretical investment level. Every point is higher than the one before it and its slope is always increasing. The tangent line of any point on the curve always has a positive slope. The candidate scenarios that lie below the efficient frontier are not optimal; there are no optimal scenarios for less cost with more benefit. No candidate scenarios lie above the efficient frontier.
Clicking a point on the graph opens the Candidate Scenario Investments page.
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