Menu
Home
People
Places
Arts
History
Plants & Animals
Science
Life & Culture
Technology
Reference.org
Post-modern portfolio theory
open-in-new
<p>Simply stated, post-modern portfolio theory (PMPT) is an extension of the traditional <a href="/facts/Modern_portfolio_theory/VzQqKnuK">modern portfolio theory</a> (MPT) of Markowitz and Sharpe. Both theories provide analytical methods for rational investors to use diversification to optimize their investment portfolios. The essential difference between PMPT and MPT is that PMPT emphasizes the return that <i>must</i> be earned on an investment in order to meet future, specified obligations, MPT is concerned only with the absolute return vis-a-vis the risk-free rate. </p>