Understanding Portfolio Theory
Credit risk transfer, Modern Portfolio Theory, CAPM, and multifactor models
About This Course
Course Information
This CPD course presents an overview of credit risk transfer mechanisms, including credit derivatives and securitization, and discusses issues with the securitization of subprime mortgages. We also assess Modern Portfolio Theory (MPT) and the CAPM, one of the foundational developments in risk-adjusted pricing and valuation. Finally, there is the explanation of Arbitrage Pricing Theory (APT) and factor models and how they can be used to model returns on investment assets.
Certificate on Completion
This course is made up of videos, questions and additional reading materials, and accounts for 4 units of CPD. One unit is the equivalent of one hour of learning.
Course Sections
This course is made up of the following sections:
- Credit risk transfer (video)
- Credit risk transfer (quiz)
- MPT and CAPM (video)
- MPT and CAPM (quiz)
- APT and multi-factor models (video)
- APT and multi-factor models (quiz)
What You Will Learn
- Describe credit risk transfer mechanisms including securitisation, credit default swaps, and monoline insurance
- Explain the assumptions and mechanics of Modern Portfolio Theory, including efficient frontiers and optimal portfolios
- Apply the Capital Asset Pricing Model (CAPM) to estimate expected returns using beta
- Compare the Sharpe ratio, Treynor ratio, and Jensen's alpha as portfolio performance measures
- Distinguish between the CAPM and Arbitrage Pricing Theory (APT) in terms of assumptions and factor models
- Evaluate fundamental, macroeconomic, and statistical factor models used in portfolio risk analysis
Who This Course Is For
- Finance professionals working in portfolio management, investment analysis, or risk assessment
- Accountants involved in investment reporting or fund performance evaluation
- Professionals preparing for FRM or CFA studies who want a structured introduction to portfolio theory
Prerequisites
- A basic understanding of statistics, including mean, standard deviation, and correlation
- Familiarity with financial instruments such as stocks and bonds
Frequently Asked Questions
Course Details
Pricing
Invest in your professional development with flexible payment options.
Everything included in your subscription:
Ready to Start Learning?
Join thousands of finance professionals who have advanced their careers with Learnsignal CPD courses.
Enrol Now