Possibility to manage portfolio risk of securities

Abstract

The instability that exists permanently in financial markets and risk rise have led to the need to manage risks in financial activities. The objective of this paper is to show how diversification of securities portfolio can lead to a portfolio that has the best characteristics, eliminating non-systemic risk. The main motive for this paper is the fact that the majority of investors do not have a positive attitude towards risk because it diminishes the marginal benefit of wealth, and the goal of investors is the maximum return on investment.

Keywords

• financial risk
• investment portfolio
• market diversification