This has led the investors to think about collective investment to set off the risk from one investment with the return from another investment. This was formally called portfolio and many theories have been developed thereafter to facilitate portfolio management. This paper discusses some of the important concepts of modern portfolio management. The paper takes a descriptive approach where all the concepts are described in such a way how they are useful for investors.
Investors always seek for an optimal investment portfolio where the returns are more and risk is less. This can be met through Portfolio Theory. The Theory helps in developing an optimal portfolio that will enable an investor to optimize market risk and generate more return from the business. Thus Portfolio theory is an approach to manage risk and return. The Theory has got much relevance in of financial management literature as many investors found them effective means of increasing the return at a given risk level. ...Show more