Search for a Term:

What is Modern Portfolio Theory?

Definition of Modern Portfolio Theory

Modern Portfolio Theory (MPT) is a financial theory that attempts to maximise expected return for a given amount of risk, or minimise the risk for a given level of expected return, by indicating the proportions of various assets that should be acquired. Essentially, MPT is a mathematical formulation of the concept of diversification, in reference to investment, with the goal of selecting a group of assets that has a collectively lower risk than any individual asset. Despite MPT's use by many in the financial industry, it has been widely criticised in recent years by fields such as behavioral economics for the financial returns not following any symmetric distribution and that correlations between asset classes are not fixed, as they can be varied by idiosyncratic events.
Do you have a question that has not yet been answered? Let us know.
Tel: 0207 0700 961 or Email: support@advfn.com

FTSE 100 Index

FTSE 100 Index intraday chart

Gulf Keystone

Gulf Keystone Chart
 GKP Chart  GKP Chat
 GKP Share Price  GKP Level 2
 GKP Info  Free ADVFN account

Top Investment Questions

Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:43 V:us D:20171125 03:42:10