TAILIEUCHUNG - Lecture Investment analysis & portfolio management - Chapter 27

After studying this chapter you will be able to understand: Portfolio theory – continued, two assets portfolio, portfolio selection, risky and risk-free assets, implications for investment. | Portfolio Management Lecture: 27 Course Code: MBF702 Outline Portfolio Theory - continued Two assets Portfolio Portfolio Selection Risky and risk-free assets Implications for investment Portfolio Theory Two asset portfolios - mathematics Investment Return Risk Proportion in portfolio (by MV) A ra σa x B rb σb (1 – x) What will be the return and risk of the portfolio? The return will be a weighted average of the two average returns, but the risk will depend on how much the fluctuations in A and B counteract each other. The extent to which this happens will depend on the correlation between the two investments returns. Formulae for risk and return of a two asset portfolio: The final element of this two asset portfolio risk equation is the vital part: It is this correlation coefficient which determines how much diversification is possible. Covariance and Correlation coefficient - calculation One way of calculating the correlation coefficient of returns between two investments in a .

• Tài chính doanh nghiệp
• Investment analysis
• Portfolio management
• Investment management
• Investment theory
• Investment environment
• Investment analysis
• Investment companies
• Time value of money
• Characteristics of investment
• Investment portfolio management
• Investment analysis & portfolio management
• Investment background
• Developments in investment theory
• Management of common stocks