#### Learning Outcome Statements

My Note:

1. Major Return Measures *a. calculate and interpret major return measures and describe their appropriate uses;*
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2. Variance and Covariance of Returns *c. calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data;*
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3. Historical Return and Risk *b. describe characteristics of the major asset classes that investors consider in forming portfolios;*
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4. Risk Aversion and Portfolio Selection *d. explain risk aversion and its implications for portfolio selection;*
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5. Portfolio Risk *e. calculate and interpret portfolio standard deviation;*
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f. describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated;*
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6. Efficient Frontier *g. describe and interpret the minimum-variance and efficient frontiers of risky assets and the global minimum-variance portfolio;*
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7. Optimal Portfolio *h. discuss the selection of an optimal portfolio, given an investor's utility (or risk aversion) and the capital allocation line.*
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