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:
“A theory if you hold it hard enough
And long enough gets rated as a creed....”
—Robert Frost (1874–1963)