Finance School of Management Basics of Portfolio Theory .s a quantitative analysis for optimal risk management Solve the problem: How to choose among financial alternatives so as to maximize investors' given p preferences Optimal choice: trade-offs between higher expected return and greater risk uesTc36 Finance School of Management Basics of Portfolio Theory ❖ A quantitative analysis for optimal risk management. ❖ Solve the problem: How to choose among financial alternatives so as to maximize investors’ given preferences. ❖ Optimal choice: trade-offs between higher expected return and greater risk