Ow does a rational investor build the optimal portfolio? Should international securities be added to that?

Each section of the essay should relate directly to the essay question and attempt to answer it, in particular to the second half of the question concerning International Securities. A critical look at all the theories, including noting their accuracies and flaws, should be demonstrated. When referencing quotations please use footnotes in the essay indicating page number.
1Elton, E.J, Gruber, M.J, Brown, S.J, and W.N. Goetzmann, Modern Portfolio Theory and Investment Analysis 6e, Wiley, 2003
2Lewis MK and Mizen PD, Monetary Economics, Oxford University, 2000, Chapter 6
3Pilbeam, K. 1998 International Finance, London: Macmillan, Chapters 7-8
4-Jones, C.P., Investments Analysis and Management, 8e, Wiley, 2002, Ch. 19,20
5Corrado, C.J. and B.D. Jordan, Fundamentals of Investment Valuation and Management 3e, Mcgraw-Hill, 2005, Ch. 17, 18
6Bodie, Z., Kane, A and A. Marcus, Essentials of Investment 6e, McGraw-Hill, 2005. Ch. 9
7Toporowski, Theories of Financial Disturbances Ch. 14
8Howells and Bain The Economics of Money, Banking and Finance: An European Text. Longman. Singapore. Chapter 2

Ow does a rational investor build the optimal portfolio? Should international securities be added to that?

Portfolio theory, diversification, capital asset pricing model
A well-structured essay showing signs of authors own thinking or research and a critical understanding of issues relevant to the answer.
Double-spacing
Numbered pages
Essay deadline: 10th March 4pm
Elton, E.J, Gruber, M.J, Brown, S.J and W.N. Goetzmann, Modern Portfolio Theory adn Investment Analysis 6e, Wiley, 2003
Lewis MK and Mizen PD, Monetary Economics, Oxford University, 2000. Chapter 6
Pilbeam, K 1998. International Finance, london: Macmillan, Chapters 7-8
Jones, C.P., InvestmentsAnalysis and Management 8e, Wiley, 2002. Ch. 19-20
Howells & Bain, The Economics of Money, Banking and Finance: An European Text. Longman. Chapter 2
Bodie, Z., Kane, A. and A. Marcus, Essentials of Investents 6e, McGraw-Hill, 2005. Chapter 9
Corrado, C.J. and Jordan, B.D., Fundamentals of InvestmentsValuation and Management , 3e, McGraw-Hill 2005. Ch. 17,18