Portfolio theory

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  • Modern Portfolio Theory

    5165 Words  | 21 Pages

    MBA Modern Portfolio Theory Corporate Finance II Final Paper Table of Contents 1. Title Page pg. 1 2. Table of Contents pg. 2 3. Introduction/ Executive Summary pg. 3 4. Modern Portfolio Theory pg. 3 5. Portfolio Management pg. 4 6. Controlling the Risk pg. 5 7. Diversification pg. 6 8. CAPM pg. 7 9. Beta: Advantages and Disadvantages pg. 8 10. Options pg. 10 11. Hedging

  • The Performance Of Portfolio Theory

    1521 Words  | 7 Pages

    Introduction This report is established to illustrate the performance of portfolio by using modern portfolio theory to make one portfolio allocation decisions per year (round) over nine years (rounds) in an investment game and find out a reasonable strategy to meet a particular investment objective. Specifically, it tries to figure out following questions: 1. How the investment decisions can be made? 2. The research that is undertook 3. The critical factors that influenced the decision 4. How are

  • Portfolio Theory And Its Application

    1709 Words  | 7 Pages

    FINC 6009 Portfolio Theory & Its Application Group Assignment Dr Hamish Malloch Cross Streams Zhe Yan 430462009 Table of Contents Executive Summary Justification of Data Section One: Portfolio Constructions Section Two: Empirical Results and Discussion Section Three: Fama-French Model Section Four: Regression Analysis Section Five: Re-consideration of Smart Beta Strategy and Conclusion Executive Summary Recent years have seen the rapid development of

  • The Pros And Cons Of Portfolio Theory

    799 Words  | 4 Pages

    During the interviews, it was understood that Portfolio Theory is difficult to apply to loaning administration. A bank is required to have a flexible credit evaluating process to capture the individuality of each loan. These differences depend on the size of the loan and the different clients’ risks. This makes it difficult to apply loan portfolio diversification compared to a portfolio of bonds or stocks. Nevertheless, more than the fixed principles banks seem to follow the intuition behind it not

  • The Concept Of The Modern Portfolio Theory

    1887 Words  | 8 Pages

    basic concept of the modern portfolio theory was written by Harry Markowitz, in which he explained that assets in an investment portfolio are not only to be selected on the basis of its merit but also by how it’s price changes relative to every other asset in the portfolio. Investment can be stated as a trade-off between expected return and risk, the riskier the investment the higher the return and vice versa. It allows us to make a decision to choose between the portfolio with either the highest rate

  • Portfolio Theory Essay example

    2185 Words  | 9 Pages

    “The Benefits of diversification are clear. Portfolio theory has played a crucial role in explaining the relationship between risk and return where more than one investment is held. It also enables us to identify optimal and efficient portfolios.” With Reference to this statement, describe, discuss and illustrate the principles of portfolio theory. Your essay should include coverage of the Markowitz Efficient Frontier and the Capital Market Line. Declaration: I confirm that this submission

  • Theories Of Harry Markowitz Portfolio Allocation Theory

    1530 Words  | 7 Pages

    Markowitz portfolio allocation theory First name, family name Date and place of birth Matriculation number Maria Titova 10.08.1992, Moscow 2227909 Telephone, e-mail Date of submission: +49 152 0218 1097 5rd December 2014 maria.titova@haw-hamburg.de Lecturer: Prof. Dr. Decker Course: Corporate Finance Name of degree program: International Business (M.Sc.) - II - I Abstract The idea of diversification is rather old. The axiom “don’t put all your eggs in one basket” definitely precedes economic theory. However

  • Modern Portfolio Theory Adaptations ( Pmpt )

    1267 Words  | 6 Pages

    Modern Portfolio Theory Adaptations MPT correlates the distribution of assets to the risk of investments. This theory also acknowledges an investors aversion to risk and required return rates (Geambasu, Sova, Jianu, & Geambasu, 2013). Moreover, MPT emphasizes the importance of diversifying as much as possible to eliminate risk. In order to measure the risk of an investment MPT relies on the standard deviation of all returns (Chambers, 2010). However, due to new analysis suggesting that MPT produces

  • Theory Of Harry Markowitz And The Portfolio Selection Process

    762 Words  | 4 Pages

    justification of investor’s behavior and development of optimization model for portfolio selection process. In 1990, Markowitz received a Nobel Prize for his contributions to financial economics and corporate finance, the first time presented in his “Portfolio Selection” (1952) and more extensively in his monography “Portfolio Selection: Efficient Diversification” (1959). His seminal works form the foundation of the Modern Portfolio Theory (MPT). Markowitz’ ideas ware later substantially expanded by his Nobel

  • Portfolio Theory : Risk, Return, Preferences And Opportunities

    1462 Words  | 6 Pages

    Introduction A portfolio is the collection of securities an investor holds. Portfolio theory is about risk, return, preferences and opportunities. E.g. if there are three assets, A, B, and C and the expected rate of return and volatility of each of the assets. Comparing asset B to asset A investors would prefer asset B over asset A because even if asset A and B have the same volatility the expected return of asset B is much higher than A. Similarly when comparing asset A to Asset C investors would