INVESTMENT ANALYSIS (ASSUMPTIONS OF HARRY MARKOWITZ PORTFOLIO ANALYSIS)

INVESTMENT ANALYSIS

ASSUMPTIONS OF HARRY MARKOWITZ PORTFOLIO ANALYSIS 

For comments, observations, questions and answers, email theotherwomaninmarriage@gmail.com  

Below are the assumptions of Harry Markowitz Portfolio Analysis that you need to know – they are very important;

1.      An investor has a given sum of money to invest in present time.

2.      Investors focus on the expected rate of return and on the variance of the security.

3.      Investors prefer more returns and less risk

4.      Investor wish to hold efficient portfolios; those yielding maximum expected return for a given level of risk or minim risk for a given level of expected return

5.      Investors should diversify not just buying a security but several

6.      The Investors seek to maximize the expected utility of total wealth

7.      All investors have the same expected single period investment horizon.

8.      Investors are risk averse

9.      Perfect market are assumed.