Portfolio and Risk Management

About this course: This course teaches you the concepts of risk and expected return. This course presents an overview of the basic concepts and techniques used to construct financial portfolios. You will learn about the investment process and get a very good understanding of economic, industry, and company analyses. We will also look at understanding and interpreting major portfolio management and risk concepts. Through this course, you will discover the basic concepts of Modern Portfolio Theory. In the second half of the course we explore the frameworks to measure investment performance, as well as the various measures of investment performance. Finally, you will learn how to measure performance of equity, bonds and hedge funds. After completing this course, you will be able to appreciate the details that go into the creation of investment portfolios.

Created by:  Indian School of Business

• Taught by:  Ramabhadran Thirumalai, Assistant Professor

  Indian School of Business

Basic Info Course 2 of 5 in the Financial Markets and Investment Strategy Specialization Level Beginner Language English How To Pass Pass all graded assignments to complete the course. User Ratings 4.4 stars Average User Rating 4.4See what learners said Coursework

Each course is like an interactive textbook, featuring pre-recorded videos, quizzes and projects.

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Indian School of Business The Indian School of Business has successfully put India on the global map of management education by nurturing young leaders with an understanding of developing economies and the society at large. Through innovations in curricula and pedagogy to reflect the shifting business landscape, the ISB is committed to providing the best venue for management education to meet the growing need to develop young leaders who can manage global challenges.

Syllabus


WEEK 1


Basics of Investments



The first module discusses the basics of investment process and the time value of money. The concept of time value of money is extended to value assets with cash flows. In the process, we develop shortcuts for valuing annuities and perpetuities. The student is then introduced to the concept of Risk and Return. The module ends with a discussion of Utility theory.


10 videos, 3 readings expand

1. Video: Introduction
2. Video: Investment Process
3. Video: Investment Philosophies
4. Reading: 6 Different Investment Philosophies
5. Reading: Common Investment Strategies of Fund Managers
6. Video: Introduction to Time Value of Money
7. Video: Ordinary Annuity
8. Video: Compounding frequency and Effective Annual Rate
9. Video: Annuity Due
10. Video: Perpetuities and stock valuation
11. Video: Expected returns and risk
12. Video: Utility theory
13. Reading: Utility theory and Attitude toward Risk

Graded: Week 1 Assessment

WEEK 2


Concept of risk and return



The second module introduces the student to the concept of portfolio math and the concept of diversification. The student is taught how to construct the investment opportunity set with risky assets and risk-free asset.The student is then introduced to the concept of Market portfolio and the Capital market line.


10 videos, 4 readings expand

1. Video: Investment Choices and Portfolios
2. Video: Capital Allocation
3. Video: Risky portfolios
4. Video: Diversification and efficient frontier
5. Video: Two fund separation
6. Video: Diversification revisited
7. Reading: The pros' guide to diversification
8. Reading: Diversification: How much is too much?
9. Reading: The 15-Stock Diversification Myth
10. Video: Investment opportunity set with two risky assets and a risk-free asset
11. Video: Investment opportunity set with three risky assets and a risk-free asset
12. Video: The optimal allocation between risky and risk-free assets
13. Video: The market portfolio and the capital market line
14. Reading: Does the composition of the market portfolio really matter?

Graded: Week 2 - Assessment

WEEK 3


Understanding investments
This module introduces the CAPM model and the concept of Beta. The student is taught how to calculate the Beta of a security. The student is also introduced to arbitrage pricing theory.


10 videos, 2 readings expand

1. Video: The CAPM
2. Video: Calculating the CAPM beta
3. Reading: Does the Capital Asset Pricing Model Work?
4. Video: The security market line
5. Video: Equilibrium
6. Video: Disequilibrium
7. Video: Estimating beta from data
8. Video: Miscellaneous topics on beta
9. Video: Determinants of the market risk premium
10. Video: Multifactor models
11. Video: The arbitrage pricing theory
12. Reading: Multifactor Models

Graded: Week 3 - Assessment

WEEK 4


Security analysis
The main focus of this module is portfolio performance evaluation. You will learn equity valuation.


10 videos, 3 readings expand

1. Video: Identifying arbitrage opportunities
2. Video: The arbitrage-free price
3. Video: Commonly-used risk factors
4. Video: Dividend discount models
5. Video: The growth rate of dividends
6. Video: Valuation based on comparable firms
7. Video: The PEG ratio and other valuation multiples
8. Video: Measuring portfolio or fund returns
9. Video: Benchmarks for portfolio performance evaluation
10. Video: Alternate performance measures
11. Reading: The Challenge: How To Benchmark Your Investment Portfolio
12. Reading: Performance Measurement: The What, Why, and How of the Investment Management Process
13. Reading: The 101 ways to measure portfolio performance

Graded: Week 4 - Assessment

WEEK 5


Final Assessment
This module tests the understanding of the student in the topics covered so far.

Graded: Comprehensive Assessment