L08 Investment Porfolios - Investment Portfolios Balancing...

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    Investment Portfolios Balancing risk and return
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    Portfolio Selection How should wealth be invested? The key is the trade-off between risk  and return Choices: Stocks, bonds, or securities and what  potion of each. Less typical Buy or rent Grad school or work
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    Time Horizons Planning Horizon-  Total length of time for which one plans  usually lifetime based on income for  retirement Decision Horizon- The length of time between decisions for  portfolio revision Trading horizon- The minimum time interval over which an  investor can revise a portfolio
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    Risk and Return Trade-Off Portfolio optimization is a two step  process 1. Determine the optimal combination of  risky assets  2. Mix the risky assets with the risk free  assets to form the portfolio
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    Risk Free Assets   Risky Assets Risk Free Assets (R
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This note was uploaded on 04/17/2009 for the course KINS 4520 taught by Professor Maxcy during the Spring '09 term at University of Georgia Athens.

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L08 Investment Porfolios - Investment Portfolios Balancing...

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