The Modern Portfolio Theory Is Based Upon

question 16

Multiple Choice

The Modern Portfolio Theory is based upon

• A) Capital Asset Pricing Model
• B) Markowitz Model
• C) Sharpe Ratio
• D) A and B only

---

Definitions:

Cash Flows

The inflows and outflows of cash and cash equivalents, representing the operational, investing, and financing activities of a business.

Post-audit

The evaluation process conducted after a project's completion to assess its actual performance against planned objectives and costs.

Accounting Rate of Return

A financial metric that measures the return on investment expected from a project or asset, calculated as the average annual profit divided by the initial investment cost.

Simple Rate of Return

A calculation that estimates the profitability of an investment, without factoring in the time value of money or cash flows over time.