A portfolio is a group of assets in which investors prefer to deposit. The portfolio gives...

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A portfolio is a group of assets in which investors prefer todeposit. The portfolio gives an opportunity to diversify risk.Diversification of risk does not mean that there will be anelimination of risk as future is always uncertain. With everyasset, there is an attachment of systematic and unsystematic risk.Even an optimum portfolio cannot eliminate market risk, but canonly reduce or eliminate the diversifiable risk. a. Help Mr. Xprospective investor to manage return and risk of a securityportfolio. b. Discuss the different types of inherent risks.

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a A Portfolio of assets is investment in more than one asset An investor should be well informed and decided about the various investment options their returns and the level of risk involved how much of the latter he can shoulder given his monetary conditions Portfolio management is investing and maintaining a group of assets at a specified proportion depending upon the return required and the level of risk that can be tolerated by the investor This differs from investor to investor ie Individual approach outlook about returns the risk Do not put all eggs in one See Answer

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