Which of the following measures or concepts are used by modern portfolio theory?
I.beta
II.inter industry diversification
III.efficient frontier
IV.correlation
A) II and III only
B) I and IV only
C) I, III and IV only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

Modern portfolio theory uses beta to measure a stock's volatility in comparison to the overall market, correlation to analyze the degree to which two or more investments move in relation to each other, and the efficient frontier to identify the optimal portfolio that offers the highest return for a specified level of risk. Inter-industry diversification is not a specific measure or concept used by modern portfolio theory.

Which of the Following Measures or Concepts Are Used by Modern