Table 4.8 Effect of Diversification Number of Securities 1 2 4 6 8 10 12 14 16 18 20 25 30 35 40 45 50 75 100 125 150 175 200 250 300 350 400 450 500 600 700 800 900 1000 Infinity Expected Portfolio Variance 46.619 26.839 16.948 13.651 12.003 11.014 10.354 9.883 9.530 9.256 9.036 8.640 8.376 8.188 8.047 7.937 7.849 7.585 7.453 7.374 7.321 7.284 7.255 7.216 7.190 7.171 7.157 7.146 7.137 7.124 7.114 7.107 7.102 7.097 7.058

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Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.