Markowitz diversification is concerned with:
A) risk and return within a portfolio.
B) weighted individual security risks.
C) weighted co-movements between securities' returns.
D) All of the above are encompassed by Markowitz diversification

Question

Quizplus · Accepted Answer

Markowitz diversification, as part of Modern Portfolio Theory, involves creating a portfolio that optimizes returns for a given level of risk. This includes considering the risk and return of individual securities (A), how individual securities' risks contribute to the portfolio (B), and how securities' returns move together or co-vary (C), to minimize overall portfolio risk while maximizing returns.

Markowitz Diversification Is Concerned With