Investment and Portfolio Analysis

Portfolio Theory - Part 5


This eCourse consists of two modules on Portfolio Management. In a world where people’s finances are finite, choices must be made in relation what to include in their investment portfolios. Investor's must know how to estimate the risk and return of their portfolio each time they select different variations of securities.

Module 1 shows how investors can work out the portfolio risk and return so they can choose the portfolio weighting that that best matches their risk preference.

While there are almost endless possibilities of portfolio composition, we show how given a specific set of stocks, the optimal portfolio composition can be calculated. Module 2 is the same portfolio for all, irrespective of risk preferences. This module shows how we arrive at the optimal portfolio and why it is the same tutorial that every rational investor will choose.


On completion of this course, you will be able to:
- Explain how the portfolio expected returns are calculated
- Explain covariance and the part it plays in the calculation of portfolio risk
- Analyze the effectiveness of diversification for different degrees of correlation amongst securities in a portfolio
- Calculate the semi-variance of a portfolio
- Explain how investors can find a portfolio that minimizes their risk exposure
- Recognize the significance of the efficient frontier in terms of portfolio selection
- Choose the optimal portfolio along an efficient frontier curve


Module 1: Risk & Return - Portfolios
Topic 1: Calculating the Risk/Return of a Portfolio
Topic 2: Portfolio Covariance
Topic 3: Portfolio Variance & Standard Deviation
Topic 4: Semivariance

Module 2: Risk & Return – Efficient & Optimal Portfolios
Topic 1: Minimum Variance Portfolio
Topic 2: Efficient Frontier
Topic 3: The Optimal Portfolio
Topic 4: The Complete Portfolio


Relevant Subject
Type 9 - Asset management
SFC:1.50, PWMA:1.50
Staff of Corporate Member: HK$450
Non-Member: HK$675
All Member: HK$450