What principle MPT works upon?

Question

Accepted Answer

MPT works on the principle of Modern Portfolio Theory.

MPT is a theory that suggests how investors can construct portfolios to optimize returns based on risk.
It emphasizes diversification and the efficient frontier.
The principle is to combine assets with different risk and return characteristics to achieve a balance.
Example: By investing in a mix of stocks, bonds, and other assets, a portfolio can be constructed to maximize returns while minimizing risk.

Accepted Answer

The principle of MPT testing is that when a magnetic flux is given to a ferromagnetic material, a magnetic field is created due to the generation of magnetic lines inside that material. If there is a fault somewhere in that material, then the magnetic lines create a second magnetic field at the place of that defect.

What principle MPT works upon?

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