Portfolio risk and diversification

Portfolio risk and diversification

Bachelor of Business Studies (BBS) — Fourth Year

Subject: Fundamentals of Investment (FIN 253)

Unit 4: Risk, Return and Portfolio Management

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of portfolio risk and diversification.
• Apply the relevant financial concepts or calculations and explain their assumptions, risks and analytical limits.

Curriculum Scope

• Concept of portfolio
• Measuring portfolio return and risk
• Correlation and diversification

Detailed Microsyllabus

1. Portfolio foundations

   1. Asset weights and combined return.
   2. Calculate portfolio return.
   3. Identify the investment set.

2. Risk and diversification

   1. Covariance and correlation.
   2. Compute portfolio risk under stated assumptions.
   3. Explain limits when assets share common exposures.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 89–91.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Examples involving current laws, rates, institutional products or Nepalese status must identify the relevant period and official materials; no changing numerical or legal requirements are invented here.