Similarities between traditional and modern portfolio theory
Answers
Answered by
1
PORTFOLIO ANALYSIS: “Portfolio analysisconsiders the determination of future risk and return in holding various blends of individual securities”. Traditional Portfolio Analysis: ... Portfolios, or combinations of securities, are thought of as helping to spread risk over many securities.
Answered by
1
This article will help you to make comparison between Traditional and Modern Portfolio Analysis.
Traditional portfolio analysis has been of a very subjective nature but it has provided success to some persons who have made their investments by making analysis of individual securities through evaluation of return and risk conditions in each security.
In fact, the investor has been able to get the maximum return at the minimum risk or achieve his return position at that indifferent curve which states his risk condition. The normal method of calculating the return on an individual security was by finding out the amount of dividends that have been given by the company, the price earning ratios, the common holding period and by an estimation of the market value of the shares.
Traditional portfolio analysis has been of a very subjective nature but it has provided success to some persons who have made their investments by making analysis of individual securities through evaluation of return and risk conditions in each security.
In fact, the investor has been able to get the maximum return at the minimum risk or achieve his return position at that indifferent curve which states his risk condition. The normal method of calculating the return on an individual security was by finding out the amount of dividends that have been given by the company, the price earning ratios, the common holding period and by an estimation of the market value of the shares.
Similar questions