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Portfolio Management: Learning Outcomes

This document outlines the learning outcomes for a course on portfolio management. It covers topics such as portfolio approaches and construction, risk and return measurement, asset pricing models, behavioral finance, risk management, technical analysis, and fintech applications in investment management. The learning outcomes are broken down into sections on portfolio management overview, portfolio risk and return in two parts, portfolio planning and construction, behavioral biases, risk management, technical analysis, and fintech in investment management. For each section, it lists the concepts and calculations the candidate should be able to describe, explain, or perform after completing the course.

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patrick Muyaya
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58 views3 pages

Portfolio Management: Learning Outcomes

This document outlines the learning outcomes for a course on portfolio management. It covers topics such as portfolio approaches and construction, risk and return measurement, asset pricing models, behavioral finance, risk management, technical analysis, and fintech applications in investment management. The learning outcomes are broken down into sections on portfolio management overview, portfolio risk and return in two parts, portfolio planning and construction, behavioral biases, risk management, technical analysis, and fintech in investment management. For each section, it lists the concepts and calculations the candidate should be able to describe, explain, or perform after completing the course.

Uploaded by

patrick Muyaya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Portfolio Management

LEARNING OUTCOMES

Portfolio Management: An Overview


The candidate should be able to:
□ describe the portfolio approach to investing
□ describe the steps in the portfolio management process
□ describe types of investors and distinctive characteristics and needs of each
□ describe defined contribution and defined benefit pension plans
□ describe aspects of the asset management industry
□ describe mutual funds and compare them with other pooled investment
products

Portfolio Risk and Return: Part I


The candidate should be able to:
□ calculate and interpret major return measures and describe their appropriate
uses
□ compare the money-weighted and time-weighted rates of return and evaluate
the performance of portfolios based on these measures
□ describe characteristics of the major asset classes that investors consider in
forming portfolios
□ explain risk aversion and its implications for portfolio selection
□ explain the selection of an optimal portfolio, given an investor’s utility (or risk
aversion) and the capital allocation line
□ calculate and interpret the mean, variance, and covariance (or correlation) of
asset returns based on historical data
□ calculate and interpret portfolio standard deviation
28 Topic 9 Portfolio Management

□ describe the effect on a portfolio’s risk of investing in assets that are less than
perfectly correlated
□ describe and interpret the minimum-variance and efficient frontiers of risky
assets and the global minimum-variance portfolio

Portfolio Risk and Return: Part II


The candidate should be able to:
□ describe the implications of combining a risk-free asset with a portfolio of risky
assets
□ explain the capital allocation line (CAL) and the capital market line (CML)
□ explain systematic and nonsystematic risk, including why an investor should not
expect to receive additional return for bearing nonsystematic risk
□ explain return generating models (including the market model) and their uses
□ calculate and interpret beta
□ explain the capital asset pricing model (CAPM), including its assumptions, and
the security market line (SML)
□ calculate and interpret the expected return of an asset using the CAPM
□ describe and demonstrate applications of the CAPM and the SML
□ calculate and interpret the Sharpe ratio, Treynor ratio, M2, and Jensen’s alpha

Basics of Portfolio Planning and Construction


The candidate should be able to:
□ describe the reasons for a written investment policy statement (IPS)
□ describe the major components of an IPS
□ describe risk and return objectives and how they may be developed for a client
□ explain the difference between the willingness and the ability (capacity) to take
risk in analyzing an investor’s financial risk tolerance
□ describe the investment constraints of liquidity, time horizon, tax concerns, legal
and regulatory factors, and unique circumstances and their implications for the
choice of portfolio assets
□ explain the specification of asset classes in relation to asset allocation
□ describe the principles of portfolio construction and the role of asset allocation
in relation to the IPS
□ describe how environmental, social, and governance (ESG) considerations may
be integrated into portfolio planning and construction

The Behavioral Biases of Individuals


The candidate should be able to:
□ compare and contrast cognitive errors and emotional biases
□ discuss commonly recognized behavioral biases and their implications for
financial decision making
□ describe how behavioral biases of investors can lead to market characteristics
that may not be explained by traditional finance

Introduction to Risk Management


The candidate should be able to:
□ define risk management
□ describe features of a risk management framework
□ define risk governance and describe elements of effective risk governance
□ explain how risk tolerance affects risk management
□ describe risk budgeting and its role in risk governance
Portfolio Management Topic 9 29

□ identify financial and non-financial sources of risk and describe how they may
interact
□ describe methods for measuring and modifying risk exposures and factors to
consider in choosing among the methods

Technical Analysis
The candidate should be able to:
□ explain principles and assumptions of technical analysis
□ describe potential links between technical analysis and behavioral finance
□ compare principles of technical analysis and fundamental analysis
□ describe and interpret different types of technical analysis charts
□ explain uses of trend, support, and resistance lines
□ explain common chart patterns
□ explain common technical indicators
□ describe principles of intermarket analysis
□ explain technical analysis applications to portfolio management

Fintech in Investment Management


The candidate should be able to:
□ describe “fintech”
□ describe Big Data, artificial intelligence, and machine learning
□ describe fintech applications to investment management
□ describe financial applications of distributed ledger technology

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