The Formation of Modern Portfolio Theories: the Main Problems and Tendencies of Development

Abstract

The article is aimed at researching the modern theories of portfolio investment, determining their place in the system of financial science and identifying the major problems and tendencies of development. The basic stages and directions of development of modern portfolio theories are considered. The theoretical base of research of portfolio investments is analyzed. Further development of portfolio theories in the model of capital assets pricing (CAPM) and in the Modigliani-Miller theorems is explored. The factors influencing the formation and the model of choice of the most optimal, in terms of correlation of the profitability and the risk indices, of the investment assets portfolio are identified. The theories of behavioral finances which have the greatest practical value in the process of formation of investment portfolio are allocated.

Keywords

• modern portfolio theory
• financial market
• portfolio investments
• systematic risk
• behavioral finances