Investment And Portfolio Management

Investment & Portfolio management (FIN3IPM) Final Revision

Liam GUI

Relevant Materials
Your revision should found on the lecture notes. Go through all tutorial questions again. Read text book if time allowed. Chapters be cover in closing: 4, 6 10, 14 16, 20 and 24. This final revision moreover covered all tutorial-relevant learning points. It only gives you a brief idea active what we perplex learn from this subject. Do not just rely on it!

 defile on Margin & Short Sales
Margin is the portion of leveraging price in account that contributed by the investor. Buy on margin means that, besides of the margin, the investor borrow some trim money as part of his investment. For example, you borrow money to sire an stock investment. You gain when share price increases. You pay screening for the money you borrowed, and leave the difference as your profits. Short exchange means that the investor bargain something that do not belong to him. For example, you sale shares that you borrowed from a broker. When the share price goes down, you buy these shares back at a cheaper price. After you return them to the broker, the difference is your profits.

Net addition Value (NAV)
The value of each share is called the net plus value (NAV). Normally, the share price will be provided as an given information in a question.



The following equivalence is how it comes out. =
?

If the market price is higher than NAV, the share gross revenue at a premium. If the market price is lower than NAV, the share sales at a discount. ? > 0 = < 0

Risk Aversion
Generally, mass do consider about risk before investment. This is manifestly because they want to get more return, but less risk. This conformation of people is called risk averse. If both of two portfolio have the same risk, they prefer the one with higher return. If both of two portfolio have the same return, they prefer the one with lower risk. They consider about risk-return trade-off. If people only care about...If you want to get a full essay, order it on our website: Ordercustompaper.com



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