1lecture04

1lecture04 -...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Open Yale Courses ECON 252: Financial Markets Lecture 4 - Portfolio Diversification and Supporting Financial Institutions (CAPM Model) << previous session | next session >> Overview: Portfolio diversification is the most fundamental concept of risk management. The allocation of financial resources in stocks, bonds, riskless, assets, oil and other assets determine the expected return and risk of a portfolio. Taking account of covariances and expected returns, investors can create a diversified portfolio that maximizes expected return for a given level of risk. An important mission of financial institutions is to provide portfolio-diversification services. Reading assignment: Fabozzi et al. Foundations of Financial Markets and Institutions
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/08/2012 for the course ECON 252 taught by Professor Robertshiller during the Spring '08 term at Yale.

Ask a homework question - tutors are online