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Simply stated, post-modern portfolio theory (PMPT) is an extension of the traditional modern portfolio theory (MPT) of Markowitz and Sharpe. Both theories provide analytical methods for rational investors to use diversification to optimize their investment portfolios.
Modern portfolio theory (MPT), or mean-variance analysis, is a mathematical framework for assembling a portfolio of assets such that the expected return is maximized for a given level of risk. It is a formalization and extension of diversification in investing, the idea that owning different kinds of financial assets is less risky than owning ...
For "choice under uncertainty" the twin assumptions of rationality and market efficiency, as more closely defined, lead to modern portfolio theory (MPT) with its capital asset pricing model (CAPM) – an equilibrium-based result – and to the Black–Scholes–Merton theory (BSM; often, simply Black–Scholes) for option pricing – an ...
Radius constructs equity and fixed-income portfolios and runs simulations to identify the best selections for portfolio managers. He plans to launch more cloud-native tools, which are easier to ...
Investors are focused on the potential extension of the stock market's bull rally heading into 2025. Wall Street experts highlighted the most important stock market charts to watch into next year.
Portfolio and direct investments are two approaches to investing that differ primarily how closely involved the investor is with the investment. The precise meaning of the terms can vary depending ...
In modern portfolio theory, the efficient frontier (or portfolio frontier) is an investment portfolio which occupies the "efficient" parts of the risk–return spectrum. Formally, it is the set of portfolios which satisfy the condition that no other portfolio exists with a higher expected return but with the same standard deviation of return (i ...
Your 401k is a valuable tool to help move your retirement nest egg in the right direction. While it may not be the optimal account to contribute to given your circumstances, I do think that if you ...