Modern Portfolio Theory: An Application with Alternative Financial Instruments

The desire of the saver is to use their savings in the most reasonable way and expect from their investment maximum return end minimum risk. Markowitz has explained this situation with portfolio theory. This study is based on the work of Markowitz. The aim of this study is to Show that financial instruments to be included in the portfolio may be preferred from not only stocks but also from alternative investment instruments. For this purpose financial instruments with available historical data are preferred. All possible portfolios are created with financial instruments. Covariance, risk and expected return calculations are made and optimal portfolio is reached