Abstract
This chapter reviews the economic concepts of risk management through diversification and asset allocation. We will also cover basic financial mathematics in Appendix A at the end of this text. The concept of portfolio theory will be discussed as well as how asset allocation assists in the reduction of risk. This chapter is not intended to be a comprehensive treatment of portfolio and investment theories. It is a background chapter to support the following more detailed chapters relating to investments. Additional resources in relation to diversification and risk reduction through portfolio theory are provided in the Further Reading list.
| Original language | English |
|---|---|
| Title of host publication | Financial Planning in Australia |
| Editors | Sharon M. Taylor, Roger Juchau |
| Place of Publication | Chatswood, N.S.W. |
| Publisher | Lexis Nexis |
| Pages | 347-376 |
| Number of pages | 30 |
| Edition | 5th |
| ISBN (Electronic) | 9780409332100 |
| ISBN (Print) | 9780409332094 |
| Publication status | Published - 2013 |
Keywords
- risk management
- financial planning