# Tag Info

This can for example be seen in modern portfolio theory (Harry Markowitz, William Sharpe) As an example consider a two asset portfolio with a full investment constraint ($w_1+w_2=1$) so we can write the proportion in asset 1 as $w_1=w$ and in asset 2 as $1-w$ The expected portfolio return $E[R_p]=wE[R_1]+(1-w)E[R_2]$ And variance \$\sigma_p^2 = ...