Which of the following is the concept and procedure for combining securities into a portfolio to minimize risk?
A) Firm specific theory
B) Modern portfolio theory
C) Optimal portfolio theory
D) Total portfolio theory

Question

Quizplus · Accepted Answer

Modern portfolio theory is the concept and procedure for combining securities into a portfolio to minimize risk. It assumes that investors seek to maximize returns and minimize risk, and that risk can be reduced through diversification by investing in assets that are not perfectly correlated.

Which of the Following Is the Concept and Procedure for Combining