Modern Portfolio Theory and Risk Management in Finance

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Added on 2023-01-23

About This Document

This document discusses Modern Portfolio Theory (MPT) and its contribution to the evaluation of investments in terms of risk and returns. It explains the concepts of unsystematic risk and systematic risk and highlights the importance of diversification in reducing unsystematic risk. The document also provides an analysis of individual stocks and portfolio characteristics based on MPT. It concludes with a discussion on risk-adjusted returns and the recommendation to invest in a portfolio.

Modern Portfolio Theory and Risk Management in Finance

Added on 2023-01-23

Related Documents

FINANCE
ACC00716
STUDENT ID:
[Pick the date]

Modern Portfolio Theory and Risk Management in Finance_1

Question 2
PART A
(i) The computation of the expected returns on selected company (i.e. Cochlear) is carried
out based on CAPM and shown below.
(ii) The computation of the expected returns on hypothetical company is carried out based on
CAPM and shown below.
PART B
The computation of the portfolio characteristics is shown as follows.
Question 3
Modern Portfolio Theory (MPT)

Modern Portfolio Theory and Risk Management in Finance_2

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