As pointed out, the basic premise of Makrowitck theory is the coorelation of different and unlinked securities, but in the recent mayhem of securities market- which is based on leverage coupled with no knowledge of what is the underlying and its value has aggravated the risk. Hence the engineers of financial instruments surely deigned the existence of Portfolio theory. As mortgage-backed securities camouflage the underlying security, how would it be possible to measure the risk let at rest assigning the commensurated return. Moreover an investor is always presumed to be a risk averse but it does not mean that he would pick the stocks with no risk and end up with riskless securities viz government bond rather what it posits is he would pick the stocks that would give her return commensuarte with the level of risk he is ready to assume. But in the mayhem as risk was not apparent, investor in order to value the securities arbitrarily assigned the return to the MBS and thereby messed up their portfolios and the eventual mayhem.