Should you put some of your eggs in the peer-to-peer lending basket?

Sammanfattning: This thesis examines whether an Estonian peer-to-peer loan portfolio can be an attractive diversification opportunity for retail investors. The posed research question is answered using the data from the Estonian P2P lending platform Bondora from 1 January 2013 to 31 December 2017 and using two different approaches: The Modern Portfolio Theory and the Treynor-Black Model. The empirical research results showcase that Estonian aggregated P2P portfolio should be added to an investment portfolio in order to achieve better risk-reward trade-off.