Modern Portfolio Theory

Portfolio theory may be the most fecund intellectual export from quantitative finance to other sciences. Social sciences outside the strictly financial domain have applied portfolio theory to subjects as diverse as regional development, 1 social psychology, 2 and information retrieval. 3 Proper understanding of portfolio theory and its place in finance and cognate sciences begins with a return to the origins of modern portfolio theory. For “the end of all our exploring/Will be to arrive where we started/And know the place for the first time.” 4 These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.