Chapter 2: FAQs 53
0%
5%
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Risk
Return
market portfolio
Figure 2-3:Reward versus risk, a selection of risky assets and the
efficient frontier (bold).
and the portfolio at the point at which it is tangential
is called theMarket Portfolio. Now, again according to
the theory, no one ought to hold any portfolio of assets
other than the risk-free investment and the Market Port-
folio.
Harry Markowitz, together with Merton Miller and
William Sharpe, was awarded the Nobel Prize for Eco-
nomic Science in 1990.
References and Further Reading
Markowitz, HM 1952 Portfolio selection.Journal of Finance 7
(1) 77–91
Ingersoll, JE Jr 1987Theory of Financial Decision Making.Row-
man & Littlefield
