Important Points for IC 99 - Asset Management Exam
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Portfolio management is a process of building a portfolio that involves making wide range of decisions regarding buying or selling of stocks, bonds, or other financial instruments.
Portfolio theory is a mathematical framework for collecting a portfolio of assets with the objective that the expected return is maximized for a given level of risk. It works on the principle that an assets risk and return should not be assessed by itself, but by contributing to a portfolios overall risk and return.
The sole objective of Portfolio Management is maximisation of returns and minimisation of risks in investment activities.
Portfolio Management is a process which encompasses the following five phases : i) Security analysis, ii) Portfolio Analysis, iii) Portfolio Selection, iv) Portfolio Revision, v) Portfolio Evaluation
Traditional approach / method : Under this approach, investors, definition of portfolio objectives, investment strategy, portfolio selection, diversification etc. are considered for following analysis and deciding portfolio management.
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