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How would you use the Excel spreadsheet to quantify and reduce the risk in your risky asset investment portfolio?
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- Portfolio diversification is the cornerstone of reducing risk in a portfolio. How would you use the Excel spreadsheet to quantify and reduce the risk in your risky asset investment portfolio?An investor’s first step of investing in the financial markets is to establish an investment objective aligned with his or her long-term financial goals and needs. The critical part of the investment process is to earn the maximum return possible while minimizing risk. Portfolio diversification is the cornerstone of reducing risk in a portfolio. How would you use the Excel spreadsheet to quantify and reduce the risk in your risky asset investment portfolio?How to construct Portfolio of different risk levels, given information about the risk-free rate and the returns on risky assets? What is a systematicrisk? How can we diversify risk efficiency?
- If you introduce a risk free asset in your portfolio of risky assets; how will this change the shape of the opportunity? What are the main implications with respect to portfolio theory?Explain if the operational risk is considered a risk or uncertainty? Why? If it is a risk, how can we quantify it? Please provide an example. In Investment, why do you need to quantify every risk?How do you perceive the relationship between risk and return in the context of investment portfolios? Can you provide examples of how an investor might balance the two, and what factors influence their decision-making process in achieving an optimal risk-return profile?
- What is an optimal risky portfolio? Discuss the process of creating an optimal portfolio of risky assets. If you are trying to create an optimal portfolio, how do you select the risky assets to include in the portfolio?What is the expected return on a portfolio? How can the expected return on a portfolio be manipulated to minimize the risk on that portfolio? Justify your answer.why do we need to quantify the investment risk and returns?
- What statistical concept do many portfolio managers use to represent a risk when considering investment performance?When assessing investment performance, what statistical notion do many portfolio managers employ to describe risk?what are some pros and cons of investing in risk management softwares ?