Portfolio Analysis

The details
Essex Business School
Colchester Campus
Autumn & Spring
Undergraduate: Level 5
Thursday 03 October 2019
Friday 20 March 2020
08 November 2019


Requisites for this module


BE314, BE331, BE332, BE335, BE630, BE631, BE937

Key module for

BSC N400JS Accounting,
BSC N420JS Accounting and Finance,
BSC N390JS Banking and Finance

Module description

This course focuses on the theoretical and empirical underpinning of trading strategies adopted by fund managers. The course shall outline the main theories of risk and return and explore the implications of these theories for investors' decisions. In doing so the course shall address questions such as: What is the appropriate measure of risk for a particular security? How might investors decide on the weightings of different assets in their portfolios? How can we identify mispriced stocks? Should you invest your savings in an actively managed fund or in a passive fund?

The course shall begin with an overview of how investors measure a security's risk and return and then, using Markowitz's mean-variance criteria, shall illustrate how efficient portfolios can be constructed. The main difficulty with Markowitz style optimisers is how fund managers predict future risk and returns of individual securities. In this course we shall introduce some of the approaches used to make those predictions.

Bonds are often regarded as a relatively low risk asset class. Alternative measures of bond risk are evaluated, and a portfolio strategy that claims to remove all risk is outlined and critically evaluated.

Module aims

The main aims of the course are:
* to give students an appreciation of different approaches to portfolio management
* to examine how investors may fully exploit the benefits of diversification
* to provide students with an understanding of the models that are relevant to the management of bond portfolios
* to introduce students to the main asset pricing models

Module learning outcomes

On successful completion of the module, students will be able to:
* understand what is meant by an efficient portfolio and how to identify efficient portfolio;
* explain how investors may fully exploit the benefits of diversification
* understand the importance of the CAPM and APT;
* evaluate competing measures of bond risk.

Skills for Your Professional Life (Transferable Skills)
Upon successful completion of the module, students should be able to:
* develop quantitative skills from assessing risk and returns across different asset classes such as stocks and bonds.
* Identify and implement investment strategies in determining the optimal mix of risk-return investment portfolios.
* critically evaluate portfolio performance and adjust portfolios to meet the investment objectives.
* evaluate financial information and make investment management decisions.

Module information

No additional information available.

Learning and teaching methods

The module material will be delivered in the following way: * 2 hours of lectures per week * Weekly seminars from Week 3 to Week 11. Work will be given in advance (see Moodle web page) for you to attempt before the class.


This module does not appear to have any essential texts. To see non-essential items, please refer to the module's reading list.

Overall assessment

Coursework Exam
30% 0%


Coursework Exam
30% 70%
Module supervisor and teaching staff
Dr Nikolaos Vlastakis, Dr Senyu Wang



External examiner

No external examiner information available for this module.
Available via Moodle
No lecture recording information available for this module.


Further information
Essex Business School

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