What is a 'Market Portfolio'
A market portfolio is a theoretical bundle of investments that includes every type of asset available in the world financial market, with each asset weighted in proportion to its total presence in the market. The expected return of a market portfolio is identical to the expected return of the market as a whole. Because a market portfolio is completely diversified, it is subject only to systematic risk (risk that affects the market as a whole) and not to unsystematic risk (the risk inherent to a particular asset class).
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BREAKING DOWN 'Market Portfolio'
Let's say the entire world financial market consists of three stocks: those of Company A, Company B and Company C.
 Company A's market capitalization is $1 billion
 Company B's market capitalization is $2 billion
 Company C's market capitalization is $3 billion
The total market portfolio would then consist of the following:
 17% Company A stock ($1 billion / $6 billion)
 33% Company B stock ($2 billion / $6 billion)
 50% Company C stock ($3 billion / $6 billion)
RELATED TERMS

Portfolio Weight
The percentage composition of a particular holding in a portfolio. ... 
Portfolio Investment
A holding of an asset in a portfolio. A portfolio investment ... 
Market Capitalization
The total dollar market value of all of a company's outstanding ... 
Capital Growth Strategy
An asset allocation strategy that seeks to maximize capital appreciation, ... 
Systematic Risk
The risk inherent to the entire market or entire market segment. ... 
Unsystematic Risk
Company or industry specific risk that is inherent in each investment. ...
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