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Optimal Risky Portfolios

Optimal Risky Portfolios. P.V. Viswanath For a First Course in INvestments. Learning Goals. How does diversification hel p in constructing optimal risky portfolios ? How do we construct the opportunity set when there are two risky assets available?

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Optimal Risky Portfolios

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  1. Optimal Risky Portfolios P.V. Viswanath For a First Course in INvestments

  2. Learning Goals • How does diversification help in constructing optimal risky portfolios? • How do we construct the opportunity set when there are two risky assets available? • How do we compute the minimum variance portfolio and the optimal portfolio when there are only two risky assets and no other assets? • How do we compute the optimal portfolio when there are two risky assets and a risk-free asset? • The Efficient Portfolio of Risky Assets • The Separation Property • The importance of covariance in diversification

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