Portfolio Construction Theory
Learn about the importance of risk and return to constructing an efficient portfolio using modern portfolio theory methodology; the role that correlation plays in portfolio diversification and portfolio optimization; how to measure portfolio performance; the significance of the Capital Asset Pricing Model to portfolio optimization and portfolio performance measurement; limitations and criticisms of modern portfolio theory.
What do you get on this course?
Objectives
By the end of this module you will be able to:
- Calculate portfolio returns
- Calculate portfolio risk in the form of standard deviation of returns
- Calculate correlation of returns for a portfolio
- Be able to create optimal portfolios for a two-asset portfolio
- Be able to explain the efficient frontier for portfolios
- Calculate Sharpe ratios
- Calculate active return
- Calculate tracking error
- Calculate information ratios
- Calculate Treynor ratios
- Calculate beta of a portfolio
- Calculate the alpha of a portfolio
key Topics
- Modern Portfolio Theory (MPT)
- Returns
- Standard deviation of returns (risk)
- Correlation of returns
- Portfolio optimization I
- Portfolio optimization II
- Portfolio optimization and the capital market line
- Evaluating portfolio risk and return
- Capital Asset Pricing Model (CAPM)
- Evaluating portfolio risk and return with CAPM
- Criticisms of MPT
2 hours of video content.
Estimated 4 hours to complete.
How to access your course
- Checkout and pay for the course(s).
- Your course(s) will be added to your ‘My Learning’ account.
- You will then receive an email with joining instructions.
- You will have 12 months access from date of purchase.
Pre-requisites
This course is open to all. To maximize the benefit of this course we recommend an understanding of Microsoft Excel.
Technical Requirements
You will need an Internet connected device to access the videos and download supporting resources. Supporting resources can be used offline, which require Microsoft Excel 2003 or later and a PDF reader.
Comprehensive Resources
You’ll be able to easily access all of the materials you need through our learning management system.
- Bite-size trainer led HD videos detailing step by step techniques and best practices.
- Download the slides and files as used in the videos, which can be completed while watching or saved for later.
- Open forum for quick problem solving.
