MODERN PORTFOLIO THEORY
Learn even more about this topic with the Encyclopedia of Personal Finance™

How do you know you are choosing the right investments for you? It is not all a matter of guesswork. Financial planners have a set of statistical tools that can determine whether your investment portfolio is producing the maximum return for the amount of risk you are willing to accept. This tutorial will introduce you to the Modern Portfolio Theory. You will learn the following:

• MODERN PORTFOLIO THEORY
• TERMINOLOGY FOR MODERN PORTFOLIO THEORY
• What Is an Efficient Portfolio?
• PROS AND CONS OF AN EFFICIENT PORTFOLIO
• SUMMARY OF MODERN PORTFOLIO THEORY

The first section of this tutorial will look at the development of this theory and its basic principles.