Portfolio Theory Application and the Contrast with Reality
DOI:
https://doi.org/10.62051/05jtjn21Keywords:
Portfolio theory in practice; efficient frontier; mental accounting; loss-averse.Abstract
This study aims to address the issue of portfolio theory, which has been a topic of debate in financial. The main objective of this study is to investigate if the portfolio theory is useful in practical application. This study determines the feasibility of applying portfolio theory in real life through comparison and case studies. The findings of the study indicate that its assumptions about investor behavior often conflict with reality. The study provides insights into financial, which may contribute to future research and practice.
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[1] Modern portfolio theory and risk management: assumptions and unintended consequences Mehdi Beyhaghi & James P. Hawley Pages 17-37 | Received 16 Aug 2012, Accepted 25 Sep 2012, Published online: 21 Dec 2012.
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