Investor
portfolio Preferences
Investor
preferences can be analyzed in term high return, low risk, comparison of risk
and return and efficient portfolio;
1. High Return
First
preference of investor is high return on the investment. for example an
investment A offer 14% and investment B offers 12% return, then investor will
go with investment with high return i.e. Investment A (Return 14%).
2. Low Risk
Second
preference of investor is to have low risk for his investment. No one in the
universe would like to sink his money in the sea. Therefore it is very rational
that every investor would like to have low risk.
3. Comparison Return & Risk
Investor
would prefer an investment with high return and low risk (relatively. it is
important to note that risk and return has direct relationship, therefore it is
not possible to have high return with low risk.
4. Efficient portfolio
Investor
would love to have portfolio, which offer higher return than other portfolio
with low risk.
