Introduction How should you invest your wealth optimally? Portfolio selection Portfolio selection is the study of how people should invest their wealth;it is also a process of trading off risk expected return to find the best portfolio of assets liabilities Your wealth portfolio contains Narrower dfn:consider only securities Ex.stocks, bonds Wider dfn:house purchase,insurance,debt Broad dfn:human capital,education THE COURSE OF FINANCE 2017 SPRING SJTU 4Introduction  How should you invest your wealth optimally?  Portfolio selection  Portfolio selection is the study of how people should invest their wealth; it is also a process of trading off risk & expected return to find the best portfolio of assets & liabilities  Your wealth portfolio contains Narrower dfn: consider only securities Ex.stocks, bonds Wider dfn: house purchase, insurance, debt Broad dfn: human capital, education THE COURSE OF FINANCE 2017 SPRING SJTU 4