About this course: When an investor is faced with a portfolio choice problem, the number of possible assets and the various combinations and proportions in which each can be held can seem overwhelming. In this course, you’ll learn the basic principles underlying optimal portfolio construction, diversification, and risk management. You’ll start by acquiring the tools to characterize an investor’s risk and return trade-off. You will next analyze how a portfolio choice problem can be structured and learn how to solve for and implement the optimal portfolio solution. Finally, you will learn about the main pricing models for equilibrium asset prices. Learners will: • Develop risk and return measures for portfolio of assets • Understand the main insights from modern portfolio theory based on diversification • Describe and identify efficient portfolios that manage risk effectively • Solve for portfolio with the best risk-return trade-offs • Understand how risk preference drive optimal asset allocation decisions • Describe and use equilibrium asset pricing models.

Who is this class for: While each course in this Specialization can be viewed as self-contained, starting with fundamentals, some background in business and finance and familiarity with basic statistical concepts is recommended. It is most appropriate for working professionals interested in asset management in their careers, or for individuals either preparing for advanced degrees in finance and economics, or looking to acquire the knowledge and tools in order to establish a portfolio that fits their needs and goals and improve their personal investment performance.

Created by: Rice University

Taught by: Arzu Ozoguz, Finance Faculty
Jones Graduate School of Business

Basic Info	Course 2 of 5 in the Investment and Portfolio Management Specialization.
Commitment	5 weeks
Language	English
How To Pass	Pass all graded assignments to complete the course.
User Ratings	4.7 stars Average User Rating 4.7See what learners said

Syllabus

WEEK 1

Module 1- Introduction & Risk and Return

This module introduces the second course in the Investment and Portfolio Management Specialization. In this module, we discuss one of the main principles of investing: the risk-return trade-off, the idea that in competitive security markets, higher expected re...

10 videos, 11 readings, 2 practice quizzes

Graded: Measuring risk and return

Graded: Module 1: Risk & Return

WEEK 2

Module 2: Portfolio construction and diversification

In this module, we build on the tools from the previous module to develop measure of portfolio risk and return. We define and distinguish between the different sources of risk and discuss the concept of diversification: how and why putting risky assets togethe...

16 videos, 12 readings, 3 practice quizzes

Graded: Measuring portfolio returns and volatility

Graded: Constructing mean-variance frontier for two risky assets

Graded: Module 2: Portfolio construction and diversification

WEEK 3

Module 3: Mean-variance preferences

In this module, we describe how investors make choices. Specifically, we look at how utility functions are used to express preferences. We review measures to describe investors’ attitude towards risk. Finally, we discuss how we can summarize investors’ prefere...

7 videos, 7 readings, 2 practice quizzes

Graded: Module 3: Mean-variance preferences

WEEK 4

Module 4: Optimal capital allocation and portfolio choice

In this module, you will learn about mean-variance optimization: how to make optimal capital allocation and portfolio choice decisions when investors have mean-variance preferences. This was one of the ground-breaking ideas in finance. We will formally set up ...

10 videos, 12 readings, 1 practice quiz

Graded: Optimal asset allocation and portfolio choice

Graded: Optimal capital allocation and portfolio choice

WEEK 5

Module 5: Equilibrium asset pricing models

In this module, we build on the insights obtained from modern portfolio theory to understand how risk and return are related in equilibrium. We first look at the main workhorse model in finance, the Capital Asset Pricing Model and discuss the expected return-b...

9 videos, 7 readings, 1 practice quiz

Graded: Module 5 Quiz: Equilibrium asset pricing models

FAQs

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Coursework

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Rice University

Rice University is consistently ranked among the top 20 universities in the U.S. and the top 100 in the world. Rice has highly respected schools of Architecture, Business, Continuing Studies, Engineering, Humanities, Music, Natural Sciences and Social Sciences and is home to the Baker Institute for Public Policy.

Pricing

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Access to course materials	Available	Available
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Ratings and Reviews

Rated 4.7 out of 5 of 75 ratings

The course is great. It was very tough but a nice experience for me.

Hey its great

Excellent course

fabulous lecture

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Portfolio Selection and Risk Management

Portfolio Selection and Risk Management

Portfolio Selection and Risk Management