Stockholm university
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Portfolio Theory

The overall aim of the course is to enable students to understand the game of returns and risk in portfolio theory, and to facilitate the application of standardized portfolio selection techniques in real-life while guiding them in critical-thinking with regard to recent advances in portfolio selection process.

Portfolio theory studies how financial assets can be combined to give an optimal level of return, given the risk. The course gives a basic insight into portfolio management, which is relevant for banks, insurance companies and pension funds, for example. The course covers both theoretical pricing models for financial assets (CAPM, APT) and methods for evaluating the results of portfolio management.
The course covers the following areas: Efficient portfolios, Markowitz prescriptions, Diversification, Capital asset pricing model (CAPM), Arbitrage pricing theory (APT), Security analysis.


  • Course structure

    Teaching format

    The course consists of a combination of lectures, seminars and group work and requires a significant portion of self-study on the part of students. Assessment for the course will be continuous and is carried throughout the different activities of the course.
    The course workload is 200 hours equivalent to 7,5 ECTS (40 hours per week equivalent to 1,5 ECTS).

    The language of instruction is English. Please note that all teaching and learning activities - such as lectures, seminars, assignments and assessment tasks – are carried out in English when the language of instruction is English.


    Assessment for the course will be continuous and is carried throughout the different course activities. Each assessment task is weighted in relation to its importance in the overall assessment of the course. The student’s results from the different assessment tasks are added up to a total course score that will then translate into the final grade for the course.

    Assessment tasks
    The course contains the following weighted assessment tasks:
    1. Group Project.
    2. Seminar (individual) Project.
    3. Individual final examination.

    After completion of the course, students will receive grades on a scale related to the intended learning outcomes of the course. Passing grades are A, B, C, D and E. Failing grades are Fx and F. A grade Fx can be completed for a grade E.


  • Schedule

    The schedule will be available no later than one month before the start of the course. We do not recommend print-outs as changes can occur. At the start of the course, your department will advise where you can find your schedule during the course.
  • Course literature

    Note that the course literature can be changed up to two months before the start of the course.

    See reading list in the current syllabus.

  • Course reports

  • Contact

    Course coordinator:
    Head of course: Ai Jun Hou