Modern portfolio theory tends to define risky investments in terms of just two factors: expected returns and

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Modern portfolio theory tends to define risky investments in terms of just two factors:

expected returns and variance (or standard deviation) of those expected returns.

What assumptions need to be made about investors and the expected investment returns (one assumption in each case) to justify this ‘two factor’ approach? Are these assumptions justified in real life?

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Business Finance Theory And Practice

ISBN: 9780273702627

7th Edition

Authors: Eddie McLaney

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Question Posted: Jul 20, 2024 02:04 AM

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Modern portfolio theory tends to define risky investments in terms of just two factors: expected returns and

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Business Finance Theory And Practice

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