MPT
Abbreviation with 2 meanings
| Stands for | Modern portfolio theory |
|---|---|
| Meanings | 2 |
| Categories | Business & Finance, Law & Legal |
MPT has two meanings. It stands for Modern portfolio theory (stock market & investing) or Multistate Performance Test (legal profession).
Meanings of MPT at a glance
| # | MPT stands for | Context |
|---|---|---|
| 1 | Modern portfolio theory | Business & Finance › Stock Market & Investing |
| 2 | Multistate Performance Test | Law & Legal › Legal Profession |
1. Modern portfolio theory
Business & Finance · Stock Market & Investing Abbreviations
Framework for building portfolios that maximize expected return for a given level of risk by combining assets whose returns are not perfectly correlated. It introduced the "efficient frontier" of optimal portfolios and formalized the idea that diversification reduces risk.
Example: Using MPT, the adviser blended stocks, bonds and gold to cut volatility without lowering expected return much.
Harry Markowitz introduced the theory in his 1952 paper "Portfolio Selection" and shared the 1990 Nobel Prize in economics. MPT measures risk as variance or standard deviation, an assumption critics say understates extreme events. It laid the groundwork for CAPM and index investing.
2. Multistate Performance Test
Law & Legal · Legal Profession Abbreviations
Bar exam component that tests practical lawyering skills: candidates receive a file of facts and a library of legal authorities and must complete a task such as a memo, brief, client letter or contract provision within 90 minutes.
Example: The MPT asked candidates to draft a persuasive brief using only the cases in the library.
Introduced in 1997 and used in most US jurisdictions; the UBE includes two MPT tasks worth 20 percent of the score. Because all necessary law is supplied, it measures skills rather than memorized rules. Graders reward candidates who follow the assigning memo's format instructions exactly.
Related abbreviations
More stock market & investing abbreviations
- MF – Mutual fund
- MLP – Master limited partnership
- MMF – Money market fund
- MOC – Market on close
- MSCI – Morgan Stanley Capital International
- NASDAQ – National Association of Securities Dealers Automated Quotations
- NAV – Net asset value
- NBBO – National best bid and offer
See all 110 stock market & investing abbreviations →
More legal profession abbreviations
- MBE – Multistate Bar Examination
- MCLE – Mandatory continuing legal education
- MEE – Multistate Essay Examination
- MPRE – Multistate Professional Responsibility Examination
- MRPC – Model Rules of Professional Conduct
- N.P. – Notary public
- NALP – National Association for Law Placement
- NCBE – National Conference of Bar Examiners
See all 46 legal profession abbreviations →
This entry is for general education and is not legal advice. Abbreviation use varies between institutions; always confirm in context.