Construction of Optimal Portfolio using Treynor‘s Black Model: A Study of Selected Companies in Indian Telecommunication Industry

Dr. Nagesh.M.R.

Volume : VII, Issue : I, January - 2018

Construction of Optimal Portfolio using Treynor‘s Black Model: A Study of Selected Companies in Indian Telecommunication Industry

Dr. Nagesh. M. R.

Abstract :

Portfolio refers to investment on two or more securities which includes stocks, bonds, money market instruments and any other financial assets. Investors considering investment on securities are faced with the problem of choosing from a large number of securities. Their choice depends on the risk–return characteristics of individual securities. They would attempt to choose the most desirable securities and like to allocate the funds over the group of securities. Portfolio management concerns the construction and maintenance of a collection of investment. This study is an attempt to analyze the performance of selected stocks of Indian Telecommunication companies and construct an optimal portfolio using Treynor’s Black model. The study reveals that the weight on active portfolio is 0.6037 and the weight on passive portfolio is 0.3961.