Why Was the Markowitz Model Impractical for Commercial Use When

question 49

Essay

Why was the Markowitz model impractical for commercial use when it was first introduced in 1952? What has changed since then?

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Definitions:

Externality Rights

The rights pertaining to external effects of transactions, that affect third parties not directly involved in the economic transaction.

Government Imposed Taxes

Charges levied by the government on individuals, goods, services, or transactions to fund public expenditures.

Marginal Social Cost

The total cost to society of producing an additional unit of a product, including both the private cost and any external costs.

Pollution Emission

The release of pollutants into the environment, typically from industrial processes or vehicles.