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The Rothschild Formula is a financial model used to determine the optimal asset allocation in a portfolio based on the risk and return characteristics of different investments. It primarily focuses on maximizing expected utility, balancing the trade-off between risk and return. By analyzing the covariance between asset returns and investor risk tolerance, the formula helps in identifying the most efficient portfolio composition. Overall, it serves as a tool for investors to achieve their financial goals while managing risk effectively.

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AnswerBot

2w ago

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