Simple math reveals truth of bonus babies
By Paul Wilmott | China Daily | Updated: 2009-02-12 07:44
"Don't put all your eggs into one basket" is the lay term for encouraging diversification.
It was applied to mathematics in a financial context in Harry Markowitz's Modern Portfolio Theory in the 1950s.
He showed how to construct a portfolio of financial assets so as to maximize expected returns for any given level of risk. This idea has inspired much theory and practice of investing, at all levels.
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