Harry M. Markowitz - Portfolio Theory and the Financial Crisis

Seminar paper from the year 2009 in the subject Didactics - Business economics, Economic Pedagogy, grade: 1,0, Johannes Gutenberg University Mainz (Fachbereich 03: Rechts- und Wirtschaftswissenschaften, Lst für Wirtschaftspädagogik), course: Seminar: Topical Aspects of the Intertwined International Economy, language: English, abstract: This seminar paper explains Markowitz's Portfolio Theory in a consolidated and understandable way. The principles of the Portfolio Theory are connected to the Financial Crisis that started as a bursting real-estate bubble in 2006. In this connection, it is shown that on the one hand the basic principles of Markowitz apply and might have helped to lower the extent of the crisis. On the other hand, the Risk-Return-Paradoxon which supported the evolution of the crisis is discussed.

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