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Understanding Modern Portfolio Theory by Mariam Saber is a document available to read on EtoBox.
What is Understanding Modern Portfolio Theory about?
Modern Portfolio Theory (MPT) is an investment theory based on constructing portfolios to maximize expected return for a given level of risk. Harry Markowitz developed MPT and won a Nobel Prize for it. MPT assumes investors are risk averse and will prefer less risky portfolios offering the same return. It also assumes higher risk is only acceptable if compensated by higher expected returns. Diversification across uncorrelated assets reduces portfolio risk. MPT defines the efficient frontier which graphs exp
- Author
- Mariam Saber
- Language
- EN