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#### What is Mean Variance Portfolio Theory a.k.a. Modern Portfolio Theory

MVPT is a mathematical framework for assembling a portfolio of assets that maximises return for a given level of risk.^{[1]}https://en.wikipedia.org/wiki/Modern_portfolio_theory

Its key tenets are^{[2]}https://en.wikipedia.org/wiki/Modern_portfolio_theory:

- owning different kinds of financial assets is less risky than owning only one type
- an asset's risk and return should be assessed by how it contributes to a portfolio's overall risk and return
- variance is a proxy for risk

#### Assumptions of MVPT

- stocks face systematic (non diversifiable) risk e.g. market risks: interest rates, inflation
- stocks face non systemic (diversifiable) risk e.g. poor management

Does it assume normal distribution of returns ?

Presumably Warren B et al focus on turning non systemic risk into something they understand and hence isn't a risk but a sure thing ?? so perhaps a takeaway is.. if investing and using ben graham techniques... take on the non systemic risk.. otherwise diversify

#### Optimal Portfolio Determined by MVPT

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#### Benefits of MVPT

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#### Key Mathematical Results

Expected return or the portfolio

#### Criticisms of Modern Portfolio Theory

#### Questions

References