0
Modern Portfolio Theory (MPT) focuses on constructing an optimal portfolio by maximizing expected return for a given level of risk through diversification. In contrast, the Capital Asset Pricing Model (CAPM) builds on MPT by establishing a relationship between an asset's expected return and its systematic risk, measured by beta. While MPT emphasizes portfolio construction, CAPM provides a framework for pricing individual securities based on market risk. Together, they form foundational concepts in finance, but they serve different purposes in investment analysis.
What else can I help you with?
What is a dominant portfolio?
Dominant Portfolio is part of the efficient frontier in modern porfolio theory. If a portfolio has a higher expected return than another portfolio with the same level of risk, a lower level of expected risk than another portfolio with equal expected return or a higher expected return and lower expected risk than the the portfolio is dominant.
What are the inadequacies of traditional method of overhead absorption?
Traditional overhead absorption methods often allocate overhead costs based on a single metric, such as direct labor hours or machine hours, which can lead to inaccurate cost assignments. This approach fails to account for the complexity of modern production environments where multiple activities drive overhead costs. Consequently, it can result in distorted product costs, misinformed pricing strategies, and suboptimal resource allocation. Additionally, it may not reflect the actual consumption of resources by different products or services.
Describe and explain modern banking system?
modern banking
How have modern accounting systems made a difference in modern organizations?
"http://wiki.answers.com/Q/How_have_modern_accounting_systems_made_a_difference_in_modern_organizations
Who is the father of modern accouting?
The father of modern acccounting is Luca Pacioli! (c. 1447 – 19 June 1517)
When was the modern portfolio theory developed?
. Harry Markowitz established the foundation of modern portfolio theory in 1952.
Who developed the modern portfolio theory?
The modern portfolio theory was developed by Harry Markowitz in 1952. His work revolutionized the field of finance by introducing the concept of diversification and the importance of balancing risk and return in investment portfolios.
What is a dominant portfolio?
Dominant Portfolio is part of the efficient frontier in modern porfolio theory. If a portfolio has a higher expected return than another portfolio with the same level of risk, a lower level of expected risk than another portfolio with equal expected return or a higher expected return and lower expected risk than the the portfolio is dominant.
What is the capital of modern day Canada?
The capitol of Canada is Ottawa.
Modern view of capital budgeting?
Meaning of Capital Budgeting
What is the modern capital of Israel?
Jerusalem is the capital of the State of Israel.
What has the author Edwin J Elton written?
Edwin J. Elton has written: 'Modern portfolio theory andinvestment analysis' -- subject(s): Investment analysis, Portfolio management
The center of the safavid empire was the modern day state of what?
"Center" referring to the capital of the Safavid empire: Tabriz, Qazvin, and Isfahan were all the capital of the Safavid empire at different points in its existence. Tabriz is located in the current East Azerbaijan Province. Qazvin is the current capital of the Province of Qazvin. Ishafan is the current capital of Isfahan Province. All are within the modern country of Iran.
What is the capital of knossos?
The city of Knossos was the capital of ancient Crete. It is adjacent to the modern capital at Heraklion.
What is Japan's modern capital?
lol well the capital of Japan is Tokyo!
What are the two key ideas of modern portfolio theory?
The two key ideas of modern portfolio theory are diversification and the trade-off between risk and return. Diversification involves spreading investments across different assets to reduce risk, while the risk-return trade-off suggests that investors should seek an optimal balance between risk and potential return based on their risk tolerance.
What is a modern social capital?
Melbourne
