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Mean-Variance Analysis and Efficient Portfolio Selection in the Nigerian Capital Market
Covenant Journal of Business and Social Sciences
View Archive Info| Field | Value | |
| Title |
Mean-Variance Analysis and Efficient Portfolio Selection in the Nigerian Capital Market
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| Creator |
Barine Michael, ACA, FCTI, Nwidobie
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| Description |
Mean-variance analysis makes possible the choice of an efficient set of security combinations that optimize investment and maximize investor utility. Portfolio returns and variances data of 56 probable portfolio combinations of share investments in eight sampled firms show that only seven probable two -asset portfolio combinations are advisable efficient combinations: two involving manufacturing firms, brewery and petroleum marketing, food and beverages and building materials, as there exists negative covariances between them; and five combinations involving investment in bank shares with investment in either shares in a firm in the petroleum marketing, brewery, food and beverages and building materials sectors. Further results show that combination of two bank securities in a portfolio is not advisable as there exists positive covariances between the four sampled banks. Portfolio combinations inclusive of a bank give high returns necessitating investors’ inclusion of investment in bank shares in their portfolio selections. To select efficient portfolio combinations maximizing portfolio returns and minimizing portfolio risks, Nigerian investors should not combine share investments in two banks as they bear the similar risks: industry and syst ematic risks with expected high volatility in earnings, but combine investment in either two manufacturing firms or a manufacturing firm with share investment in a bank in a twoasset portfolio.
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| Publisher |
Covenant University
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| Contributor |
—
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| Date |
2016-02-25
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
https://journals.covenantuniversity.edu.ng/index.php/cjbss/article/view/23
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| Source |
Covenant Journal of Business and Social Sciences; December 2013 Volume 5, No.2
2334-5708 2006-0300 |
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| Language |
eng
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| Relation |
https://journals.covenantuniversity.edu.ng/index.php/cjbss/article/view/23/19
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| Rights |
Copyright (c) 2016 Covenant Journal of Business and Social Sciences
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