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MARKOWITZ MODEL

MARKOWITZ MODEL

Portfolio Selection:
If number of portfolio we use this method to select the portfolio.
for example groups of protfolios sample
A:  NBP, Nestle
B:  NBP, Nestle, MCB
C:  Lucky, Nestle

Feasible Set of Portfolio:
The number of portfolio which are available for their selection

Efficent Portfolio: (Max. return, less risky)
The portfolio which is selected from the feasible set of protfolio.

Decision Rules 1:
If the different portfolio have same return then we select that portfolio who's risk is minimum.

Decision Rules 2:
If the different protfolio have same risk then we should select that portfolio who's return is maximum.

Draw Back:
This model just focus only those portfolio who's return are same or risk are same. It ignore the other portfolio.

Example:
No. of Portfolio          Return          Risk
A                                20%              18%
B                                19%              17%
C                                20%              16%
D                                16%              12%
E                                 22%              12%
F                                 9%                 4%


According to Rule 1:
we will select the  C portfolio because its return same as A but C risk is less than A.

According to Rule 2:
We will select the E portfolio because its risk same as D but E Return is more than D.


INVESTMENT AND PORTFOLIO MANAGEMENT
INVESTMENT VS SPECULATION AND GAMBLING
TYPES OF INVESTOR
INVESTMENT COMPANIES
TYPES OF MUTUAL FUNDS
TYPES OF BONDS FUNDS
MONEY MARKET FUNDS
SECURITIES MARKET
TYPES OF INDEX
TYPES OF BROKERS
BROKER'S ACCOUNT
MARGINAL ACCOUNT
ORDER AND ITS TYPES
RISK AND ITS TYPES
RETURN PORTFOLIO ANALYSIS
RISK PORTFOLIO ANALYSIS
RISK AND RETURN OF AN INDIVIDUAL SECURITIES
ANALYSIS OF COMMON STOCK VALUATION
CAPM MODEL (CAPITAL ASSET PRICING MODEL)
MARKOWITZ MODEL



MBA NOTES INVESTMENT AND PORTFOLIO MANAGEMENT

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