Security Analysis and Portfolio Management

Definition Modern Portfolio Theory (MPT), introduced by Harry Markowitz in 1952, provides a frame...

Portfolio Return Portfolio return is the overall gain or loss achieved by a combination of invest...

The Efficient Frontier is a fundamental concept in Modern Portfolio Theory (MPT) introduced by Ha...

The Capital Asset Pricing Model (CAPM) is a foundational finance theory that describes the relati...

Single Index Model The Single Index Model (SIM) is a simplified way to estimate the return of a s...

Arbitrage Pricing Theory, developed by Stephen Ross in 1976, is a multi-factor asset pricing mode...

Capital Market Line (CML) The Capital Market Line (CML) is a graphical representation used in the...

Portfolio evaluation is the process of assessing the performance of an investment portfolio to de...

Investment objectives and constraints form the cornerstone of any effective investment strategy. ...

The selection of an asset mix is a critical step in investment strategy. It involves deciding the...

Formulating a portfolio strategy is a fundamental process in investment management that involves ...

The selection of securities is a critical process in building an investment portfolio. It involve...

Portfolio execution refers to the actual process of buying and selling securities to construct or...

Portfolio revision involves the process of reviewing and adjusting the components of an investmen...

Portfolio evaluation is a crucial part of the investment management process that involves assessi...

1. Sharpe's Ratio Sharpe's ratio is a tool used to help investors understand the return of an inv...

A bond is a debt investment where an investor loans money to an entity (corporate or governmental...

Current Yield is a financial metric used to evaluate the annual return rate of a bond based on it...

Yield to Maturity (YTM) is a crucial concept in bond investing, representing the total return ant...

Yield to Call (YTC) is an important concept in bond investing when considering bonds that can be ...

The price-yield relationship of bonds is a fundamental concept in the bond market, describing how...

Definition of Bond Valuation Bond Valuation is a financial technique used to determine the theore...

1. Current Yield a. Example 1 What is the current yield of a 10-year 12% coupon bond with a face ...

Investment involves committing resources now to gain future benefits. It's both a science and an ...

Investing, speculating, and gambling are three distinct approaches to increasing wealth or achiev...

Investing involves allocating funds with the expectation of achieving various financial goals. Th...

Investment decisions are affected by a variety of factors. Understanding these can help investors...

Set Investment Policy Adage Insight: "If you don’t know where you are going, any road will do....

Investment Scenario Investing involves allocating funds to assets with the goal of earning income...

The E-I-C (Economy-Industry-Company) framework provides a structured approach to analyze investme...

Understanding different types of financial charts is crucial for analyzing market trends, making ...

Chart patterns are crucial tools in technical analysis, helping traders and investors to anticipa...

Oscillators are technical analysis tools that oscillate between two extremes. They are used to id...

In the context of financial markets, support and resistance levels represent key concepts that tr...

The Exponential Moving Average (EMA) is a type of weighted moving average that gives more signifi...

Risk Risk refers to the uncertainty associated with the potential for loss or the lack of capita...

Total risk associated with an investment refers to the complete spectrum of variability or volati...

Systematic risk refers to the part of the total variability in return on investments that is due ...

Risk is quantified by the variability of returns, through assigning probabilities and calculating...

Interactive Risk through Covariance When two securities are held in a portfolio, the risk involve...

Valuation is the process of determining the current worth of an asset or a company. It is a key c...

Value is a fundamental concept in finance, economics, and accounting that refers to the worth of ...

The value of shares in the stock market is influenced by a variety of factors ranging from macroe...

The intrinsic value of equity stock is a critical concept in finance, used to determine what a st...

The Relative Valuation Approach is a method used to determine the value of an asset by comparing ...

Introduction Stock prices are influenced by a variety of factors which can be categorized into: ...

Behavioral finance is a field of study that combines psychological theories with conventional eco...

Discounted cash flow method: - Dividend capitalization model - Earnings capitalization model ...