Abstract

The Modern portfolio theory has contributed to establishing the fundamental principles of portfolio management, and it is widely used in the finance industry to build diversified investment portfolios. The purpose of the proposed research is to evaluate the effectiveness of modern portfolio theory in the real estate industry by examining empirical evidence and case studies, assisting with real estate developers and property managers to make informed decisions about which properties to invest in and how to manage their real estate portfolios over time. Prior studies have primarily relied on historical data and have been unable to untangle the survey of particular cases and areas owing to recent changes, which may lead to discrepancies in the data and erroneous assessment of investment portfolios. Considering this limitation, the research essay delves explicitly into the effectiveness of modern portfolio theory in the real estate field and how it can assist in developing real estate. Consequently, according to this paper findings and the mathematical derivation, applying modern portfolio theory to real estate is still generally beneficial.

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