- The term “portfolio” refers to any combination of financial assets such as stocks, bonds and cash. Portfolios may be held by individual investors and/or managed by financial professionals, hedge funds, banks and other financial institutions. It is a generally accepted principle that a portfolio is designed according to the investor's risk tolerance, time frame, and investment objectives. The monetary value of each asset may influence the risk/reward ratio of the portfolio.
A portfolio lists the following data:
- Commercial Competencies: What type of business the corporation conducts.
- Governance & Organization: How the corporation governs and organizes itself.
- Subsidiaries: Any offshoot of sub-companies of the base corporation.
- Stockholders: Who is invested in the corporation... This can change relatively rapidly making record-keeping complex. However, limitations of communication to the speed of travel still keep this somewhat manageable.
- A typical portfolio is divided into two types. They are discretionary and non discretionary portfolios.
- Discretionary portfolio: Changeable assets that can be modified, trades, and flexible in characteristics.
- Non-discretionary portfolio: Fixed assets that are unchanging.
- In the Third Imperium, a security is a tradable financial asset of any kind. Securities are broadly categorized into:
- Debt securities (e.g., banknotes, bonds, and debentures)
- Equity securities (e.g., common stocks)
- Derivatives (e.g., forwards, futures, options, and swaps).
Portfolios are ideally objective assessments and records of a financial organization's trading, investing, and other economic activities. It is not unknown for such files and dossiers to be less than entirely accurate.
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