The textbook covers both capital market models and their applications in portfolio management. It demonstrates, among other things, the calculation of returns and risks of individual investments and portfolios, the construction of the efficient frontier based on the Markowitz model and the market model, the determination of the optimal portfolio using the efficient frontier and investor-specific indifference curves, as well as the performance measurement of portfolios. The book includes numerous exercises within the text and at the end of each chapter. It is particularly relevant for educators and students in economics with a focus on finance, but also for professionals and managers who need fundamental knowledge for successful portfolio management or are seeking further education.