True.

Here's why:

1. The Markowitz model, also known as Modern Portfolio Theory, was developed by Harry Markowitz in 1952. This model is used to construct a portfolio of assets in such a way that maximizes expected return for a given level of risk.

2. In the Markowitz model, risk is quantified as the standard deviation of the portfolio's returns. The standard deviation is a measure of how much the returns can vary from the average return. The square of the standard deviation is called variance.

3. Therefore, under the Markowitz model, the risk of a portfolio is indeed measured by the portfolio variance. The model aims to find the portfolio with the minimum variance (and hence the minimum risk) for a given expected return, or the maximum expected return for a given level of variance.

4. It's important to note that the Markowitz model assumes that investors are risk-averse, meaning they prefer less risk to more risk for the same level of expected return. This is why the model focuses on minimizing variance.

Question

True.

Here's why:

1. The Markowitz model, also known as Modern Portfolio Theory, was developed by Harry Markowitz in 1952. This model is used to construct a portfolio of assets in such a way that maximizes expected return for a given level of risk.

2. In the Markowitz model, risk is quantified as the standard deviation of the portfolio's returns. The standard deviation is a measure of how much the returns can vary from the average return. The square of the standard deviation is called variance.

3. Therefore, under the Markowitz model, the risk of a portfolio is indeed measured by the portfolio variance. The model aims to find the portfolio with the minimum variance (and hence the minimum risk) for a given expected return, or the maximum expected return for a given level of variance.

4. It's important to note that the Markowitz model assumes that investors are risk-averse, meaning they prefer less risk to more risk for the same level of expected return. This is why the model focuses on minimizing variance.

Knowee AI · Accepted Answer

True.

Here's why:

1. The Markowitz model, also known as Modern Portfolio Theory, was developed by Harry Markowitz in 1952. This model is used to construct a portfolio of assets in such a way that maximizes expected return for a given level of risk.

2. In the Markowitz model, risk is quantified as the standard deviation of the portfolio's returns. The standard deviation is a measure of how much the returns can vary from the average return. The square of the standard deviation is called variance.

3. Therefore, under the Markowitz model, the risk of a portfolio is indeed measured by the portfolio variance. The model aims to find the portfolio with the minimum variance (and hence the minimum risk) for a given expected return, or the maximum expected return for a given level of variance.

4. It's important to note that the Markowitz model assumes that investors are risk-averse, meaning they prefer less risk to more risk for the same level of expected return. This is why the model focuses on minimizing variance.

Under the Markowitz model, the risk of a portfolio is measured by the portfolio variance.

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