$3.$ Describe the key concepts underlying modern portfolio theory, including a discussion of the differences between $$na$$ve$$ and $$Markowitz$$ diversification and their implications for investment decision$-$making

This question requires a clear exposition of what na$$ve means $($i$.$e$.$ enlarging portfolios without reference to interrelationships$)$ contrasted with Markowitz diversification. Discussion of the latter should explain the role of correlation clearly, ideally with diagrams, emphasising the two $$perfect$$ cases. Some discussion of how this logic impacts on investing, including some of the evidence covered relating to international strategies, including Solnik is important as well.