Final answer:
Harry Markowitz(b) is the one who first developed portfolio theory, which is a fundamental concept in finance that focuses on risk and return optimization of an investment portfolio.
Step-by-step explanation:
The individual who first developed portfolio theory was (b) Harry Markowitz. This groundbreaking work on portfolio optimization and diversification earned him the Nobel Prize in Economic Sciences in 1990. His seminal paper, 'Portfolio Selection,' published in 1952 in the Journal of Finance, laid the foundation for modern investment theory. The key insight of Markowitz's portfolio theory is that an investor can achieve optimization by considering the overall risk and return of the portfolio as a whole, rather than focusing on individual asset returns. This approach has had a profound impact on finance, affecting how investors and financial advisors build investment portfolios to maximize expected return for a given level of risk.