TAILIEUCHUNG - Lecture Investments – Chapter 8: Optimal risky portfolios

In chapter 8 we discussed optimal risky portfolios. That decision governs how an investor chooses between risk-free assets and “the” optimal portfolio of risky assets. This chapter explains how to construct that optimal risky portfolio. We begin with a discussion of how diversification can reduce the variability of portfolio returns. After establishing this basic point, we examine efficient diversification strategies at the asset allocation and security selection levels. | CHAPTER 8 Optimal Risky Portfolios 1 Optimal Risky Portfolios Diversification and Portfolio Risk Portfolios of Two Risky Assets Asset Allocation with Stocks, Bonds, and Bills The Markowitz Portfolio Selection Model Optimal Portfolios with Restrictions on the Risk-Free Asset 2 DIVERSIFICATION AND PORTFOLIO RISK Suppose your portfolio is composed of only one stock, say, Dell Computer Corporation. What would be the sources of risk to this "portfolio"? You might think of two broad sources of uncertainty. 3 DIVERSIFICATION AND PORTFOLIO RISK First, there is the risk that comes from conditions in the general economy, such as the business cycle, inflation interest rates and exchange rates. None of these macroeconomic factors can be predicted with certainty, and all affect the rate of return on Dell stock. 4 DIVERSIFICATION AND PORTFOLIO RISK In addition to these macroeconomic factors there are firm-specific influences, such as Dell’s success in research and development, and personnel changes. These factors affect Dell without noticeably affecting other firms in the .

• Tài chính doanh nghiệp
• Investment environment
• Lecture Investments
• Active portfolio management
• Capital markets
• Optimal risky portfolios
• Correlation effects
• Investment analysis
• Portfolio management
• Investment management
• Investment theory
• Investment companies
• Time value of money
• Doctoral thesis summary
• The impact of the investment environment
• Investment decisions
• Small and medium enterprises
• Investment decision of the business
• Characteristics of investment