Post-modern portfolio theory (or PMPT) is an extension of the traditional modern portfolio theory ("MPT", which is an application of mean-variance analysis or "MVA"). Both theories propose how rational investors should use diversification to optimize their portfolios, and how a risky asset should be priced.
Read more about Post-modern Portfolio Theory: History, Overview, The Tools of PMPT
Famous quotes containing the word theory:
“Psychotherapy—The theory that the patient will probably get well anyway, and is certainly a damned ijjit.”
—H.L. (Henry Lewis)