Investment in risky assets with minimum risk
Satrajit Mandal
Lecturer
Jindal School of Banking and Finance
October 29, 2024
Satrajit Mandal Lecturer Jindal School of Banking and Finance Investment in risky assets with minimum risk
,What is a portfolio?
Stock is a risky financial asset. Bank deposits, bonds are
risk-free assets.
Stock: A financial asset that represents the ownership of a
fraction of a corporation. Example - TATASTEEL (Tata Steel
Limited stock), RELIANCE (Reliance Industries Limited
stock). Both Tata Steel Limited and Reliance Industries
Limited are listed in Bombay Stock Exchange (BSE) and
National Stock Exchange of India (NSE).
Portfolio of stocks: A collection of stocks. Example -
collection of x units of TATASTEEL and y units of RELIANCE.
The portfolio P is denoted by (x, y).
Satrajit Mandal Lecturer Jindal School of Banking and Finance Investment in risky assets with minimum risk
, Markowitz and Modern Portfolio Theory
Harry Max Markowitz is an American economist who
proposed the Modern Portfolio Theory (MPT). It is also known
as Markowitz (mean-variance) Portfolio Theory.
His work on MPT was published in the Journal of Finance in
1952. https://doi.org/10.2307/2975974
He was awarded Nobel Prize in Economics in 1990 for
proposing MPT.
Satrajit Mandal Lecturer Jindal School of Banking and Finance Investment in risky assets with minimum risk
Satrajit Mandal
Lecturer
Jindal School of Banking and Finance
October 29, 2024
Satrajit Mandal Lecturer Jindal School of Banking and Finance Investment in risky assets with minimum risk
,What is a portfolio?
Stock is a risky financial asset. Bank deposits, bonds are
risk-free assets.
Stock: A financial asset that represents the ownership of a
fraction of a corporation. Example - TATASTEEL (Tata Steel
Limited stock), RELIANCE (Reliance Industries Limited
stock). Both Tata Steel Limited and Reliance Industries
Limited are listed in Bombay Stock Exchange (BSE) and
National Stock Exchange of India (NSE).
Portfolio of stocks: A collection of stocks. Example -
collection of x units of TATASTEEL and y units of RELIANCE.
The portfolio P is denoted by (x, y).
Satrajit Mandal Lecturer Jindal School of Banking and Finance Investment in risky assets with minimum risk
, Markowitz and Modern Portfolio Theory
Harry Max Markowitz is an American economist who
proposed the Modern Portfolio Theory (MPT). It is also known
as Markowitz (mean-variance) Portfolio Theory.
His work on MPT was published in the Journal of Finance in
1952. https://doi.org/10.2307/2975974
He was awarded Nobel Prize in Economics in 1990 for
proposing MPT.
Satrajit Mandal Lecturer Jindal School of Banking and Finance Investment in risky assets with minimum risk
