Portfolio Management and Security Analysis

Everyone have excess money which he or she wants to invest in such a manner so that he or she gets maximum return with minimum risk.

In these series first we will learn how to calculate average return also called as Mean based on historic return and we will also learn how to calculate return based on probability.

Once we understood return then we will learn meaning and type of risks and how to calculate risk based on statistical techniques such that Mean, deviation from mean, probability, years under observation, standard deviation, correlation, covariance etc. How much to invest in each security or portfolio of securities so that risk will be minimum.

We will also learn meaning of “Beta (β)” one of the important terminology in the portfolio management. We will learn how to calculate these Beta under different methods using statistical tools and how to make use of these beta while making investment decisions.

CAPM i.e. Capital Assets Pricing Model is one of the important terminology in the portfolio management. We will learn meaning of these term and how to make investment decisions based on these CAPM and how to know whether the security is underpriced or overpriced.

We will also learn how to determine ideal share price of the company when information about dividend is given.

So lets learn portfolio management.