Fundamentals for understanding how a bank’s investment portfolio is managed. Objectives and composition of investment portfolios, and common bank investments are covered, focusing on their risk and return profiles. Various investment strategies are described and the development of bank investment policies is discussed.
- Identify key characteristics and calculate the return of common investment instruments
- Describe regulatory and accounting restrictions on bank investment portfolios
- Identify important elements of a bank’s investment policy and formulate an example policy
- Compare the benefits and risk of various investment strategies
- Evaluate the return on taxable and tax-exempt securities and instruments with prepayment risk