Chapter 2 Modern portfolio theory

1. History

2. Efficient financial markets

3. Diversification

4. Portfolio variance

5. Optimum portfolios

6. Portfolio theory formulae

6.1. Perfect positive correlation

6.2. Perfect negative correlation

6.3. Imperfect correlation

7. The market portfolio

8. The capital asset pricing model

8.1. Systematic and unsystematic risk

8.2. risk free + beta (return on market - risk free)

9. Efficient markets hypothesis

9.1. Weak form

9.2. Semi-strong form

9.3. Strong form

10. Statistical measurement

10.1. Alpha

10.2. Sharpe ratio

10.3. R-squared

10.4. Beta

11. Graphs

11.1. The efficient frontier

11.2. Indifference Curves

11.3. Risk free Investments