Since Markowitz's groundbreaking 1954 work in portfolio selection, the literature on portfolio theory has grown tremendously. Most familiar to practitioners is theoretical work related to capital asset pricing models. There has also been much effort devoted to making portfolio theory more practical—extending Markowitz's work to take into account such factors as

transaction costs,

differing interest rates for borrowing and lending,

multi-period investing, and

market skew.

This short book by Shouyang Wang and Yusen Xia offers a roadmap to this broad literature. Each chapter focuses on a different area of research, introducing important results and directing the reader to references. The writing is clear, following a traditional theorem-proof format. Numerical examples illustrate concepts. The final chapter pulls together a number of concepts with a detailed example testing the CAPM against the Chinese stock market.