All investors—from the largest wealth funds to the smallest individual investors—face common problems when investing: how to decide where to invest and how much risk to take. This course will serve as an introductory course in learning how to think about and solve these investment problems. You will gain theoretical knowledge of optimal portfolio construction (Markowitz Portfolio Theory and the Capital Asset Pricing Model (CAPM)), and how to measure and price risk and exploit mispriced securities. You will learn the practical skills needed to apply this theoretical knowledge to construct optimal portfolios in iLabs.
You’ll also study investment strategy and performance evaluation, and discuss best practice in portfolio performance evaluation. You will explore different valuation techniques, such as style analysis and attribution analysis, and apply them to evaluate different investment strategies.
The course will also cover the fundamental analytical framework (introducing fundamental concepts such as duration, yield, and term structure) necessary to understand bond pricing and its investment characteristics.