Portfolio theory: an aplication to the market of slected fruit in Ceará state

Abstract

The modern portfolio theory uses a scientific approach to analyze the market of selected tropical fruit in Ceará State. The key idea is to model the relation between risk and return to construct an optimal portfolio. This work presentes a short review of Markowitz’s Portfolio Theory. This paper applies portfolio theory to agricultural products, and arrives at some interesting conclusions. As a major conclusion, it suggests that portfolios consisting only of few low-risk assets have a high rather than a low-risk profile. Decision makers who want to reduce portfolio risk must invest in many different assets, even if the individual assets are risky.