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Modern Portfolio Theory - Modern Portfolio Theory Unleashing Wealth through Strategic Investing - cover

Modern Portfolio Theory - Modern Portfolio Theory Unleashing Wealth through Strategic Investing

Fouad Sabry

Publisher: One Billion Knowledgeable

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Summary

What is Modern Portfolio Theory
 
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 only one type. Its key insight is that an asset's risk and return should not be assessed by itself, but by how it contributes to a portfolio's overall risk and return. The variance of return is used as a measure of risk, because it is tractable when assets are combined into portfolios. Often, the historical variance and covariance of returns is used as a proxy for the forward-looking versions of these quantities, but other, more sophisticated methods are available.
 
How you will benefit
 
(I) Insights, and validations about the following topics:
 
Chapter 1: Modern portfolio theory
 
Chapter 2: Standard deviation
 
Chapter 3: Variance
 
Chapter 4: Multivariate normal distribution
 
Chapter 5: Correlation
 
Chapter 6: Capital asset pricing model
 
Chapter 7: Covariance matrix
 
Chapter 8: Pearson correlation coefficient
 
Chapter 9: Propagation of uncertainty
 
Chapter 10: Beta (finance)
 
Chapter 11: Tracking error
 
Chapter 12: Diversification (finance)
 
Chapter 13: Merton's portfolio problem
 
Chapter 14: Single-index model
 
Chapter 15: Post-modern portfolio theory
 
Chapter 16: Risk measure
 
Chapter 17: Treynor-Black model
 
Chapter 18: Goal-based investing
 
Chapter 19: Two-moment decision model
 
Chapter 20: Mutual fund separation theorem
 
Chapter 21: Financial correlation
 
(II) Answering the public top questions about modern portfolio theory.
 
(III) Real world examples for the usage of modern portfolio theory in many fields.
 
Who this book is for
 
Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Modern Portfolio Theory.
Available since: 02/17/2024.
Print length: 346 pages.

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