This course develops the rationale for diversification based on risk/return analysis. The theory of efficient diversification is developed and practical examples are discussed that illustrate how and why diversification is beneficial. Alternative approaches to diversification and portfolio rebalancing over time are analyzed.
Modern portfolio theory, the capital asset pricing model, and multi-factor models are explained and illustrated. The concepts of systematic risk, unsystematic risk, beta, the “efficient frontier” and the “security market line” are developed, and their applications in portfolio management are explained.
Alternative measures of portfolio performance are analyzed and evaluated.
“Portfolio Management” utilizes a combination of lecture, video, class discussion, and in-class individual and group exercises to illustrate theory and practice relevant to best practices in efficient portfolio management. In this, and in the VIF’s related courses in equity analysis and portfolio management, participants develop proficiency in using either the HP 10BII or the Texas Instruments BA II Plus calculator for financial and statistical analyses.
The target audience includes two groups:
1) Business professionals who wish to upgrade their analytical skills in making investment-related decisions related to their present or future business roles.
2) Individuals who wish to enhance their investment acumen so that they can make better personal investment decisions to enhance their wealth and manage funds invested for retirement.