Financial Management

Modern Portfolio Theory – Definition, Importance, Assumptions, Examples and Investment Analysis

Modern Portfolio Theory Definition: Modern portfolio theory (MPT), popularly known as mean-variance analysis, is a mathematical framework for accumulating a portfolio of assets such that the expected return is optimized for a given level of risk involved, generally defined as variance. Asset’s risk and return should not be assessed by itself, but by how it …

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Financial Portfolio – Analysis, Management, Strategies and Examples

Financial Portfolio Analysis: A grouping of financial assets like bonds, cash equivalents and bonds along with their mutual, exchange-traded and closed-fund counterparts is called as financial portfolio. Systematical assessment of these financial assets, products and services that make up an individual’s portfolio is termed as financial portfolio analysis. Based on objective criteria, portfolio analysis enables …

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Top 10 Worst Financial Mistakes to Avoid or Common Errors in Financial Planning

Frankly speaking personal financial planning is not everyone’s cup of tea. Even the experts sometimes, make typical mistakes. As hazardous as these mistakes are, they are unavoidable. Anyone who start financial planning is tend to face common financial problems during planning. This common financial mistakes can be avoided when talking step towards it with proper …

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Financial Backup Plan or Emergency Financial Assistance

Financial Backup Plan (Emergency Financial Assistance): Plans are made, structured, documented and weighed with respect to their pros and cons. Then you select the most desirable plan to work with. Also there’s a financial backup plan in case the original one doesn’t work out as planned.  People call it a fall-back option. The financial backup …

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What is Personal Financial Planning? Definition, Examples, Importance, Template

Personal Financial Planning Definition: Financial management of money by an individual or a family unit is known as Personal finance. The steps involves earning, spending and saving the income by keeping an account of risks involved and future life events. According to the Oxford dictionary, the word ‘finance’ signifies ‘management of money’. Khan and Jain, …

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What is Optimism Bias – Definition, Effects on Financial Decisions

Optimism Bias Definition: Optimism bias is a cognitive bias that makes an individual believe that they will be relatively safer than others if any negative event were to occur. When someone’s subjective confidence in their judgments is reliably greater than their objective accuracy, that person has optimism bias. It is like living in the utopia …

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Key Steps Involved in Personal Financial Planning Process

There are various different goals which everyone think of. One should think of only those goals which are achievable. Now, you should first prioritize your goals by its importance and the period to achieve that goal. Next and difficult step is to create a personal financial planning process and implement it to accomplish your dream …

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Determine Financial Goals – Assessment, Budgeting and Goal Setting

Are you looking forward for the answer on how to set goals or how to determine financial goals or how to achieve your goals in life or important guidelines in setting financial goals? Then here in this financial planning e-learning tutorial chapter we are going to learn step by step about setting financial goals. For …

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What is Financial Planning? Definition for a Business, Individual with Examples

Financial Planning Definition: Financial planning defines as the process of evaluating an individual’s current financial status and coming up with an effective strategy to meet the life goals. These life goals vary from an individual to another. In order to accomplish these goals, it is important for an individual to follow a series of specific …

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Financial Management for IT Services

Introduction to Financial Management for IT Services: IT sector is one of rapidly growing sectors today. Wikipedia defines Financial Management for IT Services as, “Service Delivery element of the ITIL best practice framework. Aim of this ITIL process area is to give accurate and cost effective stewardship of IT assets and resources used in providing …

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