Characteristics of Portfolio Under Risk

Davcev, Ljupco and Cabuleva, Kostadinka and Marjanova Jovanov, Tamara (2011) Characteristics of Portfolio Under Risk. Conference Proceedings, Economocs and Management in the 21st Century - Solutions for Sustainability and Growth. ISSN 978-954-23-0679-5

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The investor cannot associate a single number or payoff with investment in any asset because there is the existence of risk. The payoff should be described by a set of outcomes and each of their associated probability of occurence, which is called frequency function or return distribution. There is the examination of the two most frequently employed attributes of such a distribution: the expected return and the standard deviation. Because investors don't hold single assets, there is a concern with how one can compute the expected return and risk of a portfolio of assets given the attributes of the individual assets. One important aspect of this analysis is that the risk on a portfolio is more complex than a simple average of the risk on individual assets. So, this paper is showing how the risk of the portfolio of assets can be very different from the risk of the individual assets comprising the portfolio.

Item Type: Article
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Economics
Depositing User: Ljupco Davcev
Date Deposited: 30 Nov 2012 15:13
Last Modified: 01 Feb 2013 15:02

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