a. calculate and interpret major return measures and describe their appropriate uses;

c. calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data;

b. describe characteristics of the major asset classes that investors consider in forming portfolios;

d. explain risk aversion and its implications for portfolio selection;

e. calculate and interpret portfolio standard deviation;

f. describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated;

g. describe and interpret the minimum-variance and efficient frontiers of risky assets and the global minimum-variance portfolio;

h. discuss the selection of an optimal portfolio, given an investor's utility (or risk aversion) and the capital allocation line.