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Modern Portfolio Theory: Definition & Examples

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Who developed the modern portfolio theory?

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1.

Steve's portfolio is made up of two asset classes:

40% Stock averaging 12% annual return

60% Bonds averaging 4% annual return

What is the total estimated portfolio return?

2. What is the advantage in using modern portfolio theory?

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About This Quiz & Worksheet

These questions will test your comprehension of modern portfolio theory. You'll be answering questions on key topics like the person who came up with the modern portfolio theory and an estimated portfolio return of two asset classes.

Quiz & Worksheet Goals

Make sure you know about these points for the quiz:

  • A benefit of using modern portfolio theory
  • Characteristic of the theory
  • Modern portfolio asset class(es)

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the lesson on modern portfolio theory
  • Information recall - access the knowledge you've gained regarding an advantage of using the theory
  • Knowledge application - use your knowledge to answer questions about an example of an estimated return on investments in a portfolio and the individual who developed the modern portfolio theory

Additional Learning

You can find out more with the lesson named Modern Portfolio Theory: Definition & Examples. These topics will be addressed:

  • Explanation of modern portfolio theory
  • Risk averse definition
  • Modern portfolio theory investment examples
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