The Chapter aims to explain:

• Optimal Portfolio Selection: It explains how to select the best portfolio mix of risky and risk-free assets based on investor risk preferences.
  
• Impact of Correlation on Risk: The presentation highlights how asset correlation affects portfolio risk, showing the benefits of diversification.
  
• Utility and Indifference Curves: Discusses how investors use utility and indifference curves to match portfolios with their risk tolerance.
  
• Risk-Return Trade-Offs: Demonstrates how different asset combinations can change the risk and return profile of investments.
  
• Theoretical Foundations: Offers insights into portfolio theory principles like mean-variance analysis and the efficient frontier to optimize returns for given risks.
  

Lecture

Seminar