Portfolio theory

Solution Preview

Hi,

Below and attached are the answers to your question on portfolio theory, risk management thinking, and risk management models. I hope this helps you in your studies.

Thanks,
Fariba
OTA # 105428

Portfolio theory, risk management thinking, and risk management models

From your perspective, does portfolio theory fit within current risk management thinking, risk management models, and business risk strategy?

Portfolio theory holds that risk-averse investors can build portfolios to get the best rate of return based on a given level of market risk, emphasizing that risk is an intrinsic part of higher reward. According to the theory, established by Harry Markowitz in his paper Portfolio Selection, published in 1952 by the Journal of Finance, it is possible to build an "efficient frontier" of the most advantageous portfolios yielding the maximum possible expected ...