Author:
Hu Jiarui,You Mingjun,Zhang Jiawen
Abstract
Portfolio risk assessment is important for investors in portfolio design. Based on sound forecasts of market and company prospects, an accurate investment risk assessment can provide financial benefits to investors. By comparing the CAPM and the Fama-French three-factor model, a reasonable portfolio of investment risks is constructed by selecting five companies and one fund. The firefighter's pension problem is an example of considering the proportion of the pension that is retained and the investor's lifetime to hypothesize how the portfolio will maximize benefits under different scenarios. Portfolio forecasts based on different scenarios reflect a large extent the applicability of the chosen model to the actual situation, but it is still a challenge for investors to break away from the limitations of the data to take a more expansive view of the benefits and risks.
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