Portfolio management Flashcards
What is the portfolio approach
What is the diversification ratio
What is the efficient frontier and the limits to diversification
What are the 3 steps in the portfolio management process
Describe the planning step
Describe the execution step
Describe the feedback step
Who are individual and institutional investors
What are the two types of pension plans
Breakdown of active vs passively managed assets
What are the typical ownership structures of asset management firms and trends
What are the characteristics of mutual funds
Explain ETF’s
What is a SMA
What are hedge funds and buyout and venture capital funds
What is holding period return and arithmetic mean
What is geometric return
What is money weighted return
What is the time weighted return
What is annualised return formula
Difference between gross and net returns
Real returns and pre and post tax nominal returns
Leveraged returns
Variance and standard deviation formula
Formula for asset variance, asset covariance and portfolio variance
Portfolio variance formula and example of two asset
Explain the types of risk aversion
Describe risk tolerance and the formula for utilty with risk aversion
What does the utility with risk aversion assume and what conclusions can be made
What do indifference curves show?
What is the capital allocation line, CAPM formula and what does slope mean
What are the first four rules for diversification
Rules 5 and 6 for diversification
What is the efficient frontier and what is the optimal portfolio
P is the optimal portfolio
What is the two fund separation theorem, the investment decision and the financing decision
Number of covariance in a portfolio of n assets
Explain and intepret the CAL, Markowitz EF
What are the assumptions of homogenous expecations?
What is the capital market line and market price of risk slope
What is non-systematic risk?
Why is their no incremental reward for bearing unsystematic risk
What is capital market theoery
What is a multi-factor model to predict expected returns
What is a single index model
What is the formula for beta
What are the six assumptions of capm?
Methods of portfolio performance evaluation
Based on the SML how to detrmine whether a security is over or undervalued?
What is the security charactheristic line
What is an IPS and what stage does it occur at?
What is the purpose of an IPS
What are the nine components of an IPS
What are asbolute and relative risk objectives
What are the risk objectives of an instiution?
What are absolte and relative return objectives?
What are the restraints on the investor
What is strategic asset allocation?
What are the steps towards and actual portfolio
What are the ESG considerations
Compare the categorization of behavioural biases and what defines the two categories
What is belief perseverance bias
What is conservatism bias
What is confirmation bias
What is representative bias
c) Representative bias/ tendency to classify new information based on
past experiences and classifications
(e.g. stereotyping)
What is illusion of control bias
What is hindisght bias
What are processing errors and what is anchoring bias
What is mental accounting bias
What is framing bias
What is behavioural bias
What is loss aversion bias
What is overconfidence bias
What is self control bias
What is status quo bias
What is endowment bias
What is regret aversion bias
What are market anaomalies and what is momentum
What biases are associated with bubbles and crashes
What is the value anomaly
What is risk?
What is risk exposure
What is risk management and the four main elements of it?
What does a risk mangement framework cover?
What is risk governance and identification and management?
What is risk infrastructure and policies and processes
Describe risk monitoring, mitigating, and mangement, communications and Strategic analysis integration
What are the benefits of Strategic analysis integration
What is risk governance?
What is risk tolerance?
What is risk budgeting?
What are the financial sources of risk?
What are the non-financial sources of risk?
What is individual risk and when there are interactions between types of risk?
Types of risk metrics: derivative and bond
What VAR?
Describe risk modifications - prevention, acceptance and transfer
Risk modifications - transfer and shifting
What is TA, the logic behind it and the principles/assumptions?
Describe the links between behavioural finance and TA?
What is the difference between FA and TA?
What can line and bar charts tell us in TA?
Describe how different scales, volume and time scale can provide information
What is relative strength and how is it used?
Describe different types of trends: Uptrend, downtrend, breakdown, support, resistance, breakout
What chart patterns and reversal trends, H&S and inverse H&S
What double tops/bottoms and their properties
Double Tops/Bottoms
- the greater the number of tops/bottoms, the longer
the time interval over which this occurs, the more significant
the pattern
- bottoms tend to be more stable predictors than tops
What are continuation patterns and triangles
What are rectangles?
What are technical indicators and describe moving average?
What are bollinger bands?
at are momentum oscillators and a ROC oscillator
What is the relative strength index?
What is stochacthic oscillator?
What is a MACD?
What are sentiment indicators and their types?
Describe intermarket analysis?
How is TA applied to portfolio management?
What is Fintech and the five components of it?
Describe big data characteristics and main sources
3 main sources of alternative data
What is AI and machine learning?
What is text analytics and natural language processing
What are robo-advisory services, Algo trading and risk analytics
What is distributed ledger technology
What is block chain?
What are permissionless networks and their applications?
