标题: Reading 68: The Portfolio Management Process and the Investme [打印本页]
作者: honeycfa 时间: 2010-4-15 21:42 标题: [2010]Session18-Reading 68: The Portfolio Management Process and the Investme
Session 18: Portfolio Management: Capital Market
Theory and the Portfolio Management Process
Reading 68: The Portfolio Management Process and the Investment Policy Statement
LOS a: Explain the importance of the portfolio perspective.
Which one of the following alternatives correctly outlines the importance of the portfolio perspective?
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A) |
Market participants should attempt to eliminate the unsystematic risk associated with each security by forming portfolios that will diversify away this risk. | |
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B) |
Market participants should analyze the risk-return trade-off of a portfolio as a whole, not the risk-return trade-off of the individual investments in a portfolio. | |
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C) |
Market participants should focus on the systematic risk of the components of a portfolio not the unsystematic risk of the components of a portfolio. | |
underlying principle of the portfolio perspective is that market participants should analyze the risk-return trade-off of the portfolio as a whole, not the risk-return trade-off of the individual investments in the portfolio.
作者: honeycfa 时间: 2010-4-15 21:45
Equity pricing models assume which risk is priced?
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C) |
Both systematic and unsystematic. | |
Unsystematic risk can be diversified away. Thus, equity-pricing models are designed to reflect only systematic risk. It is assumed that the portfolio manager will take steps to diversify and reduce risk.
作者: honeycfa 时间: 2010-4-15 21:46
Diversification can reduce:
Systematic risk reflects factors that have a general effect on the security markets as a whole, and cannot be diversified away. Macroeconomic risk comes in many forms, and it is usually considered systematic risk. Unsystematic risk can be reduced through diversification.
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