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Unformatted text preview: Fin406 – Fall 2009 Smeal College of Business Penn State University 1/11/2010 ©2009 JingZhi Huang 1 Lecture 1 - Overview Fin 406 - Fall 2009 1 Professor Jingzhi Huang Smeal College of Business Penn State University Copyright © 2009 JZH Portfolio Management Process Investors or portfolio managers typically take the following portfolio management approach: Planning Execution Feedback 2 Evaluate Performance Trade Security Selection Asset Allocation Develop Market Expectations Define Objectives and Constraints • Return • Risk • Tax • Horizon • Economy • Markets • Risk-Return Model • Benchmark Portfolios • Risk-Return tradeoff • Fixed Income • Equity • Cash • Orders • Leverage • Margin • After-tax Returns • Risk • Risk-Adj. Ret. • Benchmarks I. Data on Investors Investor type, objectives, and constraints Individual investors Objective: risk-return tradeoff Constraints: investment horizon, risk preference, tax, liquidity 3 Mutual funds...
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- Fall '08
- Penn State University, Smeal College of Business Penn State University, Business Penn State, Professor Jingzhi Huang Smeal College of Business Penn State University