The Risk Study and Control in Investment Decision

摘要

We give the descriptions of the concepts of investment and risk related to investment first. Then, we consider how to measure the rates of return and the risk for alternative investments, and what factors determine an investor’s required rate of return on an investment in the second section. In order to control the risk systematically, the portfolio control process is proposed in section 3. Section 4 describes in detail the three major composite equity portfolio performance measures that combine risk and return performance into a single value. We describe each measure and its intent, and then demonstrate how to compute it and interpret the results. We also compare two of the measures and discuss how they differ and why they rank portfolios differently. The real application on the risk study and control in investment is discussed at the end.