This study session provides the critical framework and context for subsequent Level I study sessions covering equities, fixed income, derivatives, and alternative investments. Furthermore, this study session also provides a basis for the coverage of portfolio management at Levels II and III. The first reading introduces the concept of a portfolio approach to investments. After discussing the investment needs of various types of individual and institutional investors, the reading compares the types of pooled investment management products that are available to investors. The second reading introduces risk management, including a risk management framework and sources of risk. The following two readings cover portfolio risk and return measures and introduce modern portfolio theory—a quantitative framework for portfolio selection and asset pricing. The last reading focuses on the portfolio planning and construction process, including the development of an investment policy statement.
Reading 40 Portfolio Management: An Overview
Reading 41 Risk Management: An Introduction
Reading 42 Portfolio Risk and Return: Part I
Reading 43 Portfolio Risk and Return: Part II
Reading 44 Basics of Portfolio Planning and Construction