Modern Portfolio Theory - Introduction
- Topics:
- Decision Analysis
- Tags:
- Finance,
- Investment,
- MoneyChimp,
- Theory,
- Volatility
- Source:
- MoneyChimp
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Overview: From the executive summary: ‘Modern portfolio theory is the philosophical opposite of traditional stock picking. It is the creation of economists, who try to understand the market as a whole, rather than business analysts, who look for what makes each investment opportunity unique. Investments are described statistically, in terms of their expected long-term return rate and their expected short-term volatility. The volatility is equated with risk measuring how much worse than average an investment’s bad years are likely to be.’ The paper discusses the modern portfolio theory.
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Format: HTML | Date: Jan 2003 | Pages: 11
