Modern Portfolio Theory - MPT
Also called "portfolio theory" or "portfolio management theory."
According to the theory, it's possible to construct an "efficient frontier" of optimal portfolios offering the maximum possible expected return for a given level of risk. This theory was pioneered by Harry Markowitz in his paper "Portfolio Selection," published in 1952 by the Journal of Finance.
There are four basic steps involved in portfolio construction:
Investment dictionary. Academic. 2012.
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Modern portfolio theory — Principles underlying the analysis and evaluation of rational portfolio choices based on risk return trade offs and efficient diversification. The New York Times Financial Glossary … Financial and business terms
modern portfolio theory — principals underlying the analysis and evaluation of rational portfolio choices based on risk return trade offs and efficient diversification. Bloomberg Financial Dictionary … Financial and business terms
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portfolio theory — See: modern portfolio theory. Bloomberg Financial Dictionary … Financial and business terms
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