Non-invasive method for diagnosing or prognosing Alzheimer's disease, frontotemporal dementia, or other dementia involving isolating astrocyte-derived exosomes (ADEs) and neuron-derived exosomes (NDEs) from a human biological sample (i.e., plasma, serum, urine or cerebrospinal fluid), analyzing cargo extracts of the ADEs and NDEs to detect at least one specified protein or microRNA biomarker, comparing the levels and activities of detected biomarker(s) to those in control samples to identify a statistically significant difference between the detected biomarker(s) and corresponding biomarker(s) in the control sample to determine presence of Alzheimer's disease, frontotemporal dementia, or other dementia; and testing effects of drugs on levels and activities of each biomarker, as well as effects of drugs administered to test subjects on levels and activities of each biomarker in ADEs and NDEs from subsequently obtained biological samples.