A portfolios risk can be calculated directly based on the variances of the stocks it holds and

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A portfolio’s risk can be calculated directly based on the variances of the stocks it holds and their correlations to each other. Why then would a portfolio manager choose to calculate portfolio risk indirectly through a factor-based risk model?

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The Theory And Practice Of Investment Management

ISBN: 9780470929902

2nd Edition

Authors: Frank J Fabozzi, Harry M Markowitz

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Question Posted: Dec 19, 2023 01:35 AM

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A portfolios risk can be calculated directly based on the variances of the stocks it holds and

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Portfolio managers might prefer factorbased risk models because they offer a more nuance...View the full answer

The Theory And Practice Of Investment Management

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