Diversified Portfolio for Risk Management
Build a robust investment portfolio with varying risk profiles to protect principal under different market conditions. This strategy helps manage potential losses and drives balanced returns over time.
Diversified Portfolio for Risk Management
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Presentation Transcript
Example Security 1: Responsible for losses between 50% and 100% of principal: Rating AAA X Security 2: Responsible for losses between 0% and 50% of principal: Rating BBB Portfolio X has a principal of $100 million and a 2% chance of a loss over the next five years. It is rated BBB
Further Securitization Security 1: Responsible for losses between 50% and 100% of principal: Rating AAA Security 2: Responsible for losses between 20% and 50% of principal: Rating AA X Security 3: Responsible for losses between 0% and 20% of principal: Rating BBB
