Portfolio theory studies how financial assets can be combined to give an optimal level of return, given the risk. The course gives a basic insight into portfolio management, which is relevant for banks, insurance companies and pension funds, for example. The course covers both theoretical pricing models for financial assets (CAPM, APT) and methods for evaluating the results of portfolio management.
The course covers the following areas: Efficient portfolios, Markowitz prescriptions, Diversification, Capital asset pricing model (CAPM), Arbitrage pricing theory (APT), Security analysis.