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Dilfraz Singh, Lovely Professional University Unit 10: Portfolio Analysis

Unit 10: Portfolio Analysis Notes

CONTENTS
Objectives
Introduction

10.1 Inputs to Portfolio Analysis
10.2 Portfolio Analysis and Selection
10.3 Markowitz Diversification and Classification of Risks

10.4 Traditional Portfolio Analysis
10.5 Summary
10.6 Keywords
10.7 Self Assessment
10.8 Review Questions

10.9 Further Readings

Objectives

After studying this unit, you will be able to:
Explain inputs to portfolio analysis
Tanima Dutta, Lovely Professional University
Discuss portfolio risk and return
Describe portfolio analysis and selection
Understand Markowitz Diversification and Classification of Risks
Explain traditional portfolio analysis

Introduction

Portfolio means a collection or combination of financial assets (or securities) such as shares,
debentures and government securities. And it is not unusual to define a portfolio in such terms
since the institutional portfolios (insurance companies, pension funds, mutual funds, banks,
etc.) do, in fact, consist of such assets. However, in a more general sense the term ‘portfolio’ may
be used synonymously with the expression ‘collection of assets’, which can even include physical
assets (gold, silver, real estate, etc.). What is to be borne in mind is that, in the portfolio context,
assets are held for ‘investment’ purposes and not for ‘consumption’ purposes.

Task Why there is need of portfolio analysis for marketer of XYZ company?
Support your argument with examples.

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