This book offers an essential introduction to modern
portfolio theory. The book provides a number
of simple, practical examples to allow the
reader to apply the theoretical concepts presented
in each chapter. A portion of such practical cases are
worked out in Excel and made available through the
book’s website.
The book takes inspiration from Markowitz’s classical
mean-variance, it then proceeds to develop modelling
tools of increasing sophistication that eventually take
into account the role played by generic risk-averse
preferences. The book also explores a few advanced
topics: the use of multi-factor asset pricing models and
the role of background risks and human capital.