Topic: Capital Asset Pricing Model; Portfolio Theo

Topic: Capital asset pricing model; portfolio theoryName Institutional affiliationThe Portfolio TheoryOpportunities with higher risks usually have higher risks. As the result, investors like me are usually very reluctant to invest their capital due to the fear of losing their entire investment in risky ventures. On the other hand, the capital cannot grow if the investor does not invest at all. However, this topic has provided me with the solution to this problem. According to the topic on Capital asset pricing model, the Modern Portfolio Theory developed by Markowitz can enable such investors to gain maximally from their capital by diversifying their investment through the creation of an investment portfolio. For example, if I will want to invest, I will make sure that I have diversify the invest so that when there are internal factors in one company where I have put my money do not affect my total return since when the stocks in one company goes down, stocks of another company could be going up. However, this topic has also taught me that there are risks that cannot be diversified since they affect the entire market