Question

one of the mentioned assumptions of portfolio management theory is that investors are rational.A rational investors​

Answer 1

Answer:

The Portfolio Theory of Markowitz is based on the following assumptions: (1) Investors are rational and behave in a manner as to maximise their utility with a given level of income or money. (2) Investors have free access to fair and correct information on the returns and risk.

Answer 2

Answer:

One of the mentioned assumptions of portfolio management theory is that investors are rational. A rational investor:

Prefers a higher return for a given risk and prefers a lower risk for a given return.

Explanation:

This led to what is called the Modern Portfolio Theory, which emphasizes the tradeoff between risk and return. If the investor wants a higher return, he has to take higher risk. But he prefers a high return but a low risk and hence the problem of a tradeoff.