The purpose of this thesis is to investigate if an investor can apply Modern Portfolio Theory (MPT) in order to achieve a higher return than investing in an index portfolio. Combining a strong portfolio that beats the market in the longrun would be the ultimate goal for most investors.The theories that are used to analyze [...]
Banks’ loan portfolio diversification
Credit Risk management within banking is continually developing. Advances in credit-scoring models have allowed banks to improve their avoidance of non credit-worthy firms. Through meticulous credit evaluation, banks attempt to minimize credit-specific risk to their ideal cost of capital. However, this practice may not sufficiently reduce the total loan portfolio risk; systematic risk. To minimize [...]