Course Summary
Learn how to select portfolios and manage risk effectively with this comprehensive course. Explore various strategies and techniques to optimize your investment portfolio.Key Learning Points
- Understand the fundamentals of portfolio selection and risk management
- Learn how to apply various models and techniques to optimize investment portfolios
- Explore the role of diversification and risk management in portfolio selection
Job Positions & Salaries of people who have taken this course might have
- USA: $82,000
- India: ₹6,00,000
- Spain: €40,000
- USA: $82,000
- India: ₹6,00,000
- Spain: €40,000
- USA: $112,000
- India: ₹10,00,000
- Spain: €60,000
- USA: $82,000
- India: ₹6,00,000
- Spain: €40,000
- USA: $112,000
- India: ₹10,00,000
- Spain: €60,000
- USA: $95,000
- India: ₹8,00,000
- Spain: €50,000
Related Topics for further study
Learning Outcomes
- Understand the principles of portfolio selection and risk management
- Apply various models and techniques to optimize investment portfolios
- Develop effective strategies for diversification and risk management
Prerequisites or good to have knowledge before taking this course
- Basic understanding of finance and investment
- Familiarity with Excel or other spreadsheet software
Course Difficulty Level
IntermediateCourse Format
- Online
- Self-paced
Similar Courses
- Financial Markets
- Investment Management
- Risk Management
Related Education Paths
- Financial Risk Management Certification
- Investment Management Certification
- Portfolio Management Certification
Related Books
Description
When an investor is faced with a portfolio choice problem, the number of possible assets and the various combinations and proportions in which each can be held can seem overwhelming. In this course, you’ll learn the basic principles underlying optimal portfolio construction, diversification, and risk management. You’ll start by acquiring the tools to characterize an investor’s risk and return trade-off. You will next analyze how a portfolio choice problem can be structured and learn how to solve for and implement the optimal portfolio solution. Finally, you will learn about the main pricing models for equilibrium asset prices.
Outline
- Module 1- Introduction & Risk and Return
- Introduction & Welcome to class
- Overview – No free lunches! Risk and return trade-off
- Measuring returns: Geometric average returns
- Measuring returns: Arithmetic average returns
- Measuring risk: Volatility of returns
- Alternative measures of risk
- More on measuring risk and risk measures
- Measuring risk and return: Illustration with four stocks
- Historical record on risk-return patterns
- Summary
- Grading Policy
- How to use discussion forums
- Meet & Greet: Get to know your classmates
- Pre-Course Survey
- Lecture handouts: Risk and return: Measuring returns
- Risk and return: Measuring returns Quiz Solutions
- Lecture handouts: Risk and return: Measuring risk
- Risk & Return: Measuring risk Quiz solutions
- Lecture handouts: Risk and return: Historical record
- Investing: Stocks for the long run (optional)
- Module 1: Risk & Return Solutions
- Risk and return: Measuring returns
- Risk & Return: Measuring risk
- Module 1: Risk & Return
- Module 2: Portfolio construction and diversification
- Introduction: Measuring portfolio risk and return
- Measuring the expected return of a portfolio
- Let’s review how we measure risk for a single asset
- Finding the volatility of a portfolio return
- Portfolio volatility: Another example
- Measuring the co-movement between securities
- Putting it all together… portfolio risk and diversification
- Diversification and portfolio risk
- Diversification: A graphical illustration with two assets
- Diversification: A graphical illustration with three assets
- Diversification: Systematic risk and idiosyncratic risk
- Diversification: An illustration from international equity markets (US and Japan only)
- Mean-variance frontier and efficient portfolios: International equity investment example (G5 countries)
- Are you diversified adequately?
- Mean-variance portfolio analysis
- Summary
- Measuring expected portfolio return Quiz solutions
- Measuring portfolio volatility Quiz solutions
- Accompanying spreadsheets for "Diversification: An illustration from international equity markets (US and Japan only)"
- A Note on using EXCEL Solver
- Diversification and portfolio risk Quiz solutions
- Equity investing: Globalization and diversification (optional)
- Module 2: Portfolio construction and diversification- Solutions
- Measuring expected portfolio return
- Measuring portfolio volatility
- Diversification and portfolio risk
- Module 2: Portfolio construction and diversification
- Module 3: Mean-variance preferences
- Introduction
- Preferences: Utility functions
- Risk aversion
- Expected utility
- Mean-variance preferences
- Portfolio choice problem with mean-variance preferences: A graphical illustration with equity and bond data
- Summary
- A note on measuring risk aversion and certainty equivalent
- Utility and Risk aversion Quiz solutions
- Portfolio choice with mean-variance preferences quiz solutions
- Measure your own risk tolerance
- Module 3: Mean-variance preferences- Solutions
- Utility and risk aversion
- Portfolio choice with mean-variance preferences
- Module 3: Mean-variance preferences
- Module 4: Optimal capital allocation and portfolio choice
- Introduction
- Capital allocation line
- Solving for the optimal capital allocation
- Optimal capital allocation example: U.S. equities and Treasuries
- Finding the optimal risky portfolio: Maximizing the Sharpe ratio
- Main insight: The optimal risky portfolio is independent of preferences
- Finding the optimal risk portfolio when you have multiple risky securities
- Investment decision process
- What’s wrong with mean-variance portfolio analysis?
- Summary
- A note on optimal capital allocation
- Accompanying spreadsheets for "Optimal Capital Allocation Example: US Equities and Treasuries"
- Mean-variance optimization Quiz solutions
- Analytical solution to MVE portfolio (two risky assets)
- A note on finding the mean variance efficient portfolio (Two risky assets)
- Accompanying spreadsheets for "Finding the optimal risky portfolio: Maximizing the Sharpe ratio"
- A note on finding the minimum variance frontier with multiple risky assets
- Accompanying spreadsheet for finding minimum variance frontier with multiple risky assets
- Optimal capital allocation and portfolio choice- Solutions
- Mean-variance optimization
- Optimal capital allocation and portfolio choice
- Module 5: Equilibrium asset pricing models
- Introduction
- From optimal portfolio choice to asset pricing models
- Insight #1 from Capital Asset Pricing Model: Passive investing is efficient
- Insight #2 from Capital Asset Pricing Model: What determines the market risk premium?
- Beta and systematic risk
- Capital Asset Pricing Model: Expected return-beta relationship
- Multi-factor models
- Fama-French three-factor model
- Summary
- "The parable of money managers" (optional)
- "The dying business of stock picking" WSJ (optional)
- Equilibrium asset pricing models: Capital Asset Pricing Model Quiz solutions
- Module 5 Quiz: Equilibrium asset pricing models- Solutions
- End-of-Course Survey
- Equilibrium asset pricing models: Capital Asset Pricing Model
- Module 5 Quiz: Equilibrium asset pricing models
Summary of User Reviews
This course on portfolio selection and risk management has received positive reviews from users. The course covers a variety of topics and provides practical applications for investment professionals. Many users appreciated the real-world examples used throughout the course.Key Aspect Users Liked About This Course
Real-world examples used throughout the coursePros from User Reviews
- Covers a variety of topics related to portfolio selection and risk management
- Provides practical applications for investment professionals
- Instructors are knowledgeable and engaging
- Course material is well-organized and easy to follow
- Quizzes and assignments help reinforce key concepts
Cons from User Reviews
- Some users found the course material to be too basic
- Lack of interaction with other students in the course
- The course is relatively short and may not provide enough in-depth information for some users
- Some users found the pace of the course to be too fast
- The price of the course may be too high for some users
Arzu Ozoguz
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