Section outline

  • Lecture Contents:

    Building portfolio, Efficient frontier, Asset allocation decision, The implication of portfolio model etc.

    Lecture Outcome:

    After studying these contents, students will be able to:

    1. Appreciate the significance of the efficient frontier and understand how an optimal portfolio of risky assets is determined. 
    2. Understand the importance of the asset allocation decision.
    3. Apply the Markowitz optimization procedure to asset classes and understand the practical implications of doing so. 
    4. Recognize how the total risk of a portfolio can be broken into two components