Editing Behavioral economics (section)

=== Traditional finance ===
The accepted theories of finance are referred to as traditional finance. The foundation of traditional finance is associated with the [[modern portfolio theory]] (MPT) and the [[efficient-market hypothesis]] (EMH). Modern portfolio theory is based on a stock or portfolio's expected return, standard deviation, and its correlation with the other assets held within the portfolio. With these three concepts, an efficient portfolio can be created for any group of assets. An efficient portfolio is a group of assets that has the maximum expected return given the amount of risk. The efficient-market hypothesis states that all public information is already reflected in a security's price. The proponents of the traditional theories believe that "investors should just own the entire market rather than attempting to outperform the market". Behavioral finance has emerged as an alternative to these theories of traditional finance and the behavioral aspects of psychology and sociology are integral catalysts within this field of study.<ref>{{Cite web|title=Harry Markowitz's Modern Portfolio Theory [The Efficient Frontier]|url=https://www.guidedchoice.com/video/dr-harry-markowitz-father-of-modern-portfolio-theory/|access-date=2020-09-21|website=Guided Choice|language=en-US}}</ref>