Discuss the theory: Markowitz Efficient Theory. (500 words)

- Begin with the theory of portfolio and Markowitz's main part in the development portfolio analysis.
- Include the expected return and risk ideas and the definition of risk as variance/standard deviation provided by Markowitz.
- Talk about the amounts and the investor's objective of getting the maximum return corresponding to a given risk level.
- Show diversification and explain that a portfolio based on the efficient frontier is in the best situation possible because these stocks have a low correlation and in a well-diversified portfolio, you don’t have all your eggs in one basket.
- Explain the optimization process to design a portfolio that is both risk-efficient and loss-trending.
- Enclose the essay by highlighting Markowitz’s main theory that is followed by modern portfolio theory.