Markowitz was the first to show the important benefits from diversification that arise from combining individual securities into portfolios and to demonstrate that the portfolio decision problem of an investor is equivalent to the maximisation of his or her expected utility. The modern portfolio theory was developed by Harry Markowitz, presenting it in 1952 in an article entitled ‘Portfolio Selection’. Diversification can generate some major strategic advantage, for example, the wider spread of activities, the greater the potential access to high performing market sectors. If a firm can reduce its reliance on particular products or markets, then it can withstand more comfortably the impact of a major reverse in any single market. Most firms diffuse their efforts across a range of products, market segments and customers in order to spread more thinly the risks of declining trade and profitability. The term ‘portfolio’ is usually applied to combinations of securities, but the principles underlying security portfolio formation can be applied to combinations of any type of assets, including investment projects. Modern Portfolio Theory Essay, Research Paper ![]() Название: Modern Portfolio Theory Essay Research Paper The ![]() ![]() Реферат: Modern Portfolio Theory Essay Research Paper The
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