APPLICATION OF THE MODERN PORTFOLIO THEORY IN DIVERSIFICATION OF THE DEBT SECURITIES PORTFOLIO IN EMERGING MARKETS
DOI:
https://doi.org/10.7251/ZREFIS1613067GKeywords:
modern portfolio theory, diversification, debt securities, bond marketAbstract
The term "portfolio analysis", introduced in the economic theory by Harry Markowitz, is not a new term in scientific literature. However, analysis and criticism in the papers of local and foreign authors are mainly based on the examples of developed capital markets. There are very few cases of application of the portfolio analysis in the domestic capital market. The focus of this paper is on implementation of diversification of the bonds on the Banja Luka Stock Exchange. Using Markowitz's portfolio selection, we will prove that diversification, including all limitations, is possible and applicable onto the domestic bonds in the capital market.References
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