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What is role of portfolio manager?
Deciding the Best Investment plan for an individual by considering income ,age and capability to take risk. Risk diversification Efficient portfolio Asset Allocation Beta Estimation Rebalncing Portfolio Portfolio Revision Risk and Return Analysis of a security.
What is capital market line?
It is discussed in efficient market hypothesis, meaning that you can not beat the market. Capital market line is drawn as a tangent on the curve representing both risky and non risky portfolio. At the point where tangent is drawn represents a model portfolio akin to market. All portfolio above this point has a higher risk reward ratio.
What type of risk is avoidable through proper diversification?
portfolio risk
A primary advantage associated with holding a diversified portfolio of financial assets is the reduction of risk The relevant risk a particular stock would contribute to?
A primary advantage associated with holding a diversified portfolio of financial assets is the reduction of risk. The relevant risk a particular stock would contribute to a well-diversified portfolio is the stock.
How does the notion of risk and reward govern the behavior of financial managers?
In the world of financial management, a common principle is that great reward cannot be achieved without great risk. The balance between these two extremes governs the behavior of financial managers. Their job is to reap the highest returns on investments while limiting the amount of risk placed in each investment.
What is risk management software?
Risk Management Software is used to balance risk with potential reward. It is used by insurance companies to determine insurance rates for clients without posing too much risk to the company.
What is a dominant portfolio?
Dominant Portfolio is part of the efficient frontier in modern porfolio theory. If a portfolio has a higher expected return than another portfolio with the same level of risk, a lower level of expected risk than another portfolio with equal expected return or a higher expected return and lower expected risk than the the portfolio is dominant.
What is role of portfolio manager?
Deciding the Best Investment plan for an individual by considering income ,age and capability to take risk. Risk diversification Efficient portfolio Asset Allocation Beta Estimation Rebalncing Portfolio Portfolio Revision Risk and Return Analysis of a security.
What is capital market line?
It is discussed in efficient market hypothesis, meaning that you can not beat the market. Capital market line is drawn as a tangent on the curve representing both risky and non risky portfolio. At the point where tangent is drawn represents a model portfolio akin to market. All portfolio above this point has a higher risk reward ratio.
What Portfolio is located on the capital market line to the left of the market portfolio?
a portfolio with a long position in risk free assest
What type of risk is avoidable through proper diversification?
portfolio risk
What is the difference between an efficient portfolio and the optimal portfolio?
The difference is that an efficient portfolio is one that offers the lowest risk for the greatest return or vice versa. An optimal portfolio is one that is preferred by investors because it is tailored specifically to the individual's risk preferences.
A primary advantage associated with holding a diversified portfolio of financial assets is the reduction of risk The relevant risk a particular stock would contribute to?
A primary advantage associated with holding a diversified portfolio of financial assets is the reduction of risk. The relevant risk a particular stock would contribute to a well-diversified portfolio is the stock.
How does the notion of risk and reward govern the behavior of financial managers?
In the world of financial management, a common principle is that great reward cannot be achieved without great risk. The balance between these two extremes governs the behavior of financial managers. Their job is to reap the highest returns on investments while limiting the amount of risk placed in each investment.
Objectives of portfolio management?
best possible returns based on the market. 1.Maximize Value: Every innovation portfolio is constrained by either human or financial resources. Optimizing the risk-adjusted expected commercial value of the innovation pipeline within those constraints is the primary objective of portfolio management. Making better investment decisions increases returns. 2.Achieve Balance: Portfolios should attempt to balance investments and initiatives across a number of dimensions including both risk and reward, but also across product lines, geographically, by phase and launch date, and by innovation type. There are a number of important analyses that will help portfolio review committees answer questions regarding mix and balance in the pipeline. 3.Maintain Alignment: Innovation portfolios should be congruent with the business and innovation strategies articulated by the organization. This starts with the question of whether the pipeline is capable of delivering against the organic growth goals of the organization. We should also be aligning investment individual business unit or product line objectives.
What is portfolio revision?
Portfolio revision is the process of reviewing and making changes to an investment portfolio. This may involve rebalancing the portfolio to maintain desired asset allocation, adding or removing investments based on market conditions or changing investment goals, or adjusting the risk level of the portfolio. Portfolio revision is important to ensure that the portfolio continues to align with the investor's objectives and risk tolerance.
What is the three types of investment portfolio?
Based on your risk tolerance level we can form 3 basic kinds of portfolios. 1. Aggressive Portfolio - For individuals with high risk tolerance 2. Balanced Portfolio - For individuals with average risk tolerance 3. Conservative Portfolio - For individuals with low risk tolerance You have to decide in which category you would fall into. It is not mandatory to choose only these 3 portfolio's. You can opt to be somewhere between an aggressive and balanced portfolio wherein your investments would neither fall under aggressive category nor would they fall under balanced. Your investment objective & horizon and risk taking ability would determine the kind of portfolio that would suit you.
