This document discusses portfolio evaluation and performance measurement. It defines a portfolio as a grouping of financial assets such as stocks, bonds, and cash that are held by investors or managed professionals. Portfolio performance is measured based on factors like return, risk, liquidity, and diversification. Common measures used for evaluation include Treynor's measure, Sharpe's measure, and Jensen's measure. The efficient market hypothesis and random walk theory are also discussed.

1. PERFORMANCE
EVALUATION OF
PORTFOLIO
MADE BY: PORTFOLIO CRUNCHERS

2. PORTFOLIO
EVALUATION
process of
comparing the
return earned
refers to the
evaluation of the
performance

3. EVALUATION OF PORTFOLIO

4. A GROUPING OF FINANCIAL ASSETS SUCH AS
STOCKS, BONDS AND CASH EQUIVALENTS, AS WELL
AS THEIR MUTUAL, EXCHANGE-TRADED AND
CLOSED-FUND COUNTERPARTS. PORTFOLIOS ARE
HELD DIRECTLY BY INVESTORS AND/OR MANAGED
BY FINANCIAL PROFESSIONALS.
MEANING
OF
PORTFOLIO

5. FACTORS AFFECTING PERFORMANCE MEASURE
RETURN
RISK
MARKETBILITY
LIQUIDITY
DIVERSIFICATION

6. MEASURES FOR EVALUATION

7. BIG THREE PVT. LTD

8. BIG THREE PVT.LTD
PORTFOLIO AVG.RETURN RATINGS
COLGATE 15% *****
COCA-COLA 12% ****
MORGAN 10% ***
BUSCH 12% ****
-A RATINGAGENCY
* WE PROVIDE RATINGS ON OUR ASSUMPTIONS ON
WEEKLY BASIS

10. TREYNOR’S MEASURE

12. SHARPE’S MEASURE

13. JENSEN’S MEASURE
 Jensen’s Alpha = Total Portfolio Return – Risk-Free Rate –
[Portfolio Beta × (Market Return – Risk-Free Rate)]

14. EFFICIENT MARKET HYPOTHESIS
Efficient-market
hypothesis (EMH) states
that stock market
efficiency causes existing
share prices to always
incorporate and reflect all
relevant information.

15. 2 MIN’S MAGGI FEVER!

16. DEMAND FOR MAGGI

17. ASSUMPTIONS OF EMH
INFORMATION
TRANSACTION COST
BORROW & LEND
LARGE NO. OF INVESTOR’S
TRANSPARENCY
REFLECTION OF PRICE
NON INFLUENTIAL

18. RANDOM WALK THEORY
Random walk theory is based on independent behavior
of new prices of information that are received.

19. ARBITRAGE PRICING THEORY
 Arbitrage means, the simultaneous buying and selling of
securities.
 This theory given by S.ROSS. says that Each security is
linked with multiple factor.
 Returns gets influenced by several logical factors like GDP,
national income, personal income etc.
 Each security can earn risk free economic profit if logically
buying and selling of securities is done
 The profit rises when an investor construct a zero investment
portfolio with sure profit.
HOW DOES ARBITRAGE OPPORTUNITY ARISES?
 When any investor takes quick opportunity of buying
and selling of securities in multiple market while earning
sure profits.

20. QUESTIONS?

21. SPECIAL THANKS TO SHARDUL SIR FOR GIVING US
OPPORTUNITY TO PRESENT .WE HAVE TRIED OUR
BEST TO GRAB THIS OPPORTUNITY GIVEN BY YOU
WITH ALL OUR DEDICATION AND EFFORTS.
MADE BY:
SHRUTI
KUSUM
DAYA
RUCHIKA
ASHOK
JAGJIT
ANKIT
SUDESH
ABBAS
JUNAID

22. THANK YOU.