Learning Module 1 of Portfolio Management 8–12% of the exam
Portfolio Risk and Return: Part I
11 lessons. About 0 minutes in cram mode, 0 minutes in full.
Lessons for this module are being written. The outcomes and lesson plan below are final.
Lessons
- 1 Historical Return and Risk
Coming soon
- 2 Other Investment Characteristics
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- 3 Risk Aversion and Portfolio Selection
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- 4 Utility Theory and Indifference Curves
Coming soon
- 5 Application of Utility Theory to Portfolio Selection
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- 6 Portfolio Risk & Portfolio of Two Risky Assets
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- 7 Portfolio of Many Risky Assets
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- 8 The Power of Diversification
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- 9 Efficient Frontier: Investment Opportunity Set & Minimum Variance Portfolios
Coming soon
- 10 Efficient Frontier: A Risk-Free Asset and Many Risky Assets
Coming soon
- 11 Efficient Frontier: Optimal Investor Portfolio
Coming soon
What the exam expects you to do
- Describe characteristics of the major asset classes that investors consider in forming portfolios.
- Explain risk aversion and its implications for portfolio selection.
- Explain the selection of an optimal portfolio, given an investor’s utility (or risk aversion) and the capital allocation line.
- Calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data.
- Calculate and interpret portfolio standard deviation.
- Describe the effect on a portfolio’s risk of investing in assets that are less than perfectly correlated.
- Describe and interpret the minimum-variance and efficient frontiers of risky assets and the global minimum-variance portfolio.