Its a measure of the riskiness – the greater the figure the more risky.

However do appreciate (as it says in the lecture notes) that these calculations can no longer be asked in the exam. You are only expected to understand the idea of portfolio theory without calculations.

I have left the lectures because I think the idea makes more sense if you have seen a few numbers.

Hi you say in this lecture the formula for combining investments is given in the exam but I don’t see it on the past papers I have – is this no longer the case?

It is no longer the case. The reason is that (as you will have read in the Lecture Notes that go with the lecture) the examiner has said that he will no longer ask for calculations on portfolio theory.

The only reason that I have left the lecture in, is that he has said that he does expect you to understand the ideas in portfolio theory. I think the best way of understanding is to see the examples, even though (again) you will not be expected to do calculations in the exams.

As it says in the Lecture Notes that go with the lectures, you are expected to understand and explain portfolio theory but you will not be asked calculations. The calculations are in the lecture just to make sense of the discussion.

( We do not have lectures on this website that are not relevant to the next exam )

Ooops – I mistyped my previous reply (and I have now corrected it!!!)

All our lectures for all papers are relevant for the next exams (otherwise we would remove them) and where relevant we add more lectures (as I have done recently for P4).

If i were to rank a list of my best lecturers in my entire study course, i will definitely list Mr John Moffat the top, the video lecturers are straight to the point and simplified that it makes it easier for understanding. I really appreciate the entire team of open tuition taking all the effort,time and commitment to give this kind of opportunity free of charge accessible to any students globally.

Yes it is possible. The example is simply to show that is is possible to mix two investments and end up with lower risk than either (but that is not always going to be the case )

Do remember that you can not be asked portfolio calculations – you can only be asked to explain the principles. I only go through the examples to (hopefully) make the idea more clear.

If you read the last paragraph of the introduction to the chapter in the Course Notes, I make it clear that you are now only expected to know the principles involved and will not be required to use the formulae.
As I explain in the note, I have left the examples in the notes just to help make the principles clear.

anonymous says

Sir, what does that 4.08% mean? i have studied it in the past but never understood what it meant.

John Moffat says

Its a measure of the riskiness – the greater the figure the more risky.

However do appreciate (as it says in the lecture notes) that these calculations can no longer be asked in the exam. You are only expected to understand the idea of portfolio theory without calculations.

I have left the lectures because I think the idea makes more sense if you have seen a few numbers.

anonymous says

Ok I get that. Thank you very much. Examples are useful for understanding the concept and I appreciate that. Thank you again.

Karen says

Hi you say in this lecture the formula for combining investments is given in the exam but I don’t see it on the past papers I have – is this no longer the case?

John Moffat says

It is no longer the case. The reason is that (as you will have read in the Lecture Notes that go with the lecture) the examiner has said that he will no longer ask for calculations on portfolio theory.

The only reason that I have left the lecture in, is that he has said that he does expect you to understand the ideas in portfolio theory. I think the best way of understanding is to see the examples, even though (again) you will not be expected to do calculations in the exams.

denisehenwood says

thank you

Angela says

Is this lecture still relevant to Jun 2015 exam?

John Moffat says

As it says in the Lecture Notes that go with the lectures, you are expected to understand and explain portfolio theory but you will not be asked calculations. The calculations are in the lecture just to make sense of the discussion.

( We do not have lectures on this website that are not relevant to the next exam )

Angela says

If so, may I know the lectures that are irrelevant to Jun 2015 exam? Thank you so much for your reply.

John Moffat says

Ooops – I mistyped my previous reply (and I have now corrected it!!!)

All our lectures for all papers are relevant for the next exams (otherwise we would remove them) and where relevant we add more lectures (as I have done recently for P4).

sogan0 says

nice lecture

SOUD SAEED says

If i were to rank a list of my best lecturers in my entire study course, i will definitely list Mr John Moffat the top, the video lecturers are straight to the point and simplified that it makes it easier for understanding. I really appreciate the entire team of open tuition taking all the effort,time and commitment to give this kind of opportunity free of charge accessible to any students globally.

John Moffat says

Thank you very much for your comments

puiling says

Is it possible when adding new investment giving rise to higher risk?

John Moffat says

Yes it is possible. The example is simply to show that is is possible to mix two investments and end up with lower risk than either (but that is not always going to be the case )

Do remember that you can not be asked portfolio calculations – you can only be asked to explain the principles. I only go through the examples to (hopefully) make the idea more clear.

puiling says

Thanks =)

roomilaangel says

How to download these lectures?? plz help

John Moffat says

You can not download the lectures – you can only watch them online.

Only the course notes can be downloaded.

It is the only way that we can keep this website free of charge.

akee says

This is a technical paper, but manageable if we thoroughly practice the past papers after completion of course

aneskia says

last paper, lots of unforeseen events and 20days to my credit! Can i do this/

John Moffat says

Yes you can

(Since you are on portfolio theory, do appreciate that you will no longer be asked calculations but you can be expected to understand/explain)

jaleah says

Hi , I am unable to view your lectures. I keep getting the message server not found. any advice on what i should do? Thanks

admin says

use google chrome please

htung00 says

I no longer see the asset portfolio formulae on the formulae sheet. Was this section removed?

John Moffat says

If you read the last paragraph of the introduction to the chapter in the Course Notes, I make it clear that you are now only expected to know the principles involved and will not be required to use the formulae.

As I explain in the note, I have left the examples in the notes just to help make the principles clear.

dickroy1962 says

I am fairly comfortable with P4

chantel says

i am comforted in the knowledge that i’m not the only one struggling with this paper p4…….. my final paper!

nyachatonda says

I need to pass P4 no matter what

p4nitemare says

me too. i am tired of this paper and am doing everything i can to pass it once and for all. it has been a nightmare to me.