Portfolio risk and return

Portfolio risk and return

Bachelor of Business Studies (BBS) — Second Year

Subject: Fundamentals of Financial Management (MGT 215)

Unit 4: Fundamentals of Risk and Return

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 return.
• Apply the relevant financial model, calculation or analytical approach and explain its assumptions and decision implications.

Curriculum Scope

• Covariance
• Correlation
• Returns and risk in a portfolio

Detailed Microsyllabus

1. Portfolio return

   1. Asset weights and weighted expected return.
   2. Weight totals and investment allocation.
   3. Interpret diversification objectives.

2. Portfolio risk

   1. Covariance and correlation between assets.
   2. Compute portfolio risk using joint movement.
   3. Explain why risk is not generally a simple weighted average.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 41-43.

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.