In this thesis, we discussed Harry Markowitz's modern portfolio theory, which provides a mathematical framework for effective investing. The thesis explains basic concepts such as diversification, expected return, volatility, and correlation. We focused in particular on determining the optimal proportions of risky and risk-free instruments in a portfolio. The main part of the thesis is an empirical analysis in which we used real market data to examine the impact of time horizon on portfolio composition. We found that the optimal proportions differ significantly when based on monthly data compared to annual data. This emphasizes that the selection of appropriate data for calculation is crucial for the success of an investment strategy and the achievement of investment goals.
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