Module Details

BE313-5-AU-CO: Portfolio Analysis

Year: 2017/18
Department: Essex Business School
Essex credit: 15
ECTS credit: 7.5
Available to Study Abroad / Exchange Students: Yes
Full Year Module Available to Study Abroad / Exchange Students for a Single Term: No
Outside Option: Yes
Pre-requisites: BE300 OR EC111 OR IA712

Supervisor: Dr Nikolaos Vlastakis
Teaching Staff: Nikos Vlastakis
Contact details:

Module is taught during the following terms
Autumn Spring Summer

Module Description

This course focuses on the theoretical and empirical underpinning of trading strategies adopted by fund managers. The course shall outline the main theories of risk and return and explore the implications of these theories for investors’ decisions. In doing so the course shall address questions such as: What is the appropriate measure of risk for a particular security? How might investors decide on the weightings of different assets in their portfolios? How can we identify mispriced stocks? Should you invest your savings in an actively managed fund or in a passive fund?

The course shall begin with an overview of how investors measure a security’s risk and return and then, using Markowitz’s mean-variance criteria, shall illustrate how efficient portfolios can be constructed. The main difficulty with Markowitz style optimisers is how fund managers predict future risk and returns of individual securities. In this course we shall introduce some of the approaches used to make those predictions.

Bonds are often regarded as a relatively low risk asset class. Alternative measures of bond risk are evaluated, and a portfolio strategy that claims to remove all risk is outlined and critically evaluated.

The main aims of the course are to:
• to give students an appreciation of different approaches to portfolio management
• to examine how investors may fully exploit the benefits of diversification
• to provide students with an understanding of the models that are relevant to the management of bond portfolios
• to introduce students to the main asset pricing models

This course enables students to be able to:
• understand what is meant by an efficient portfolio and how to identify efficient portfolio;
• explain how investors may fully exploit the benefits of diversification
• understand the importance of the CAPM and APT;
• evaluate competing measures of bond risk.

Learning and Teaching Methods

The module material will be delivered in the following way:

* 2 hours of lectures per week
* Weekly seminars from Week 3 to Week 11. Work will be given in advance (see Moodle web page) for you to attempt before the class.


30 per cent Coursework Mark, 70 per cent Exam Mark


Coursework assessment in the form of an in-class test worth 30% (around weeks 10-11) and Unseen Summer examination worth 70%

Exam Duration and Period

2:00 during Summer Examination period.

Other information

Upon successful completion of the module, students should be able to:
* develop quantitative skills from assessing risk and returns across different asset classes such as stocks and bonds.
* Identify and implement investment strategies in determining the optimal mix of risk-return investment portfolios.
* critically evaluate portfolio performance and adjust portfolios to meet the investment objectives.
* evaluate financial information and make investment management decisions.


  • All reading lists are available here: (Essex login required).

Further information