PORTFOLIO SELECTION

This Section deals with the selection of the optimal portfolio based on the mean variance model developed by Harry Markowitz. The model/procedure has two parts (i) Technical determination of the set of efficient portfolios from the available feasible set. (ii) Personal–choosing the best risk return opportunity from the efficient set, which is consistent with the investor’s attitude towards risk.
Depending upon the treatment of the technical part, there are two broad approaches to explain the portfolio theory, namely, one-step optimization  and two-step optimization.

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