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Diversification and Ethiopian asset classes

Module 02 / 5 · 65 min

Combine assets so that risks partly cancel, then build Tana's IPS and asset allocation from the asset classes and limits that actually exist in Ethiopia.

In this module you will learn to

Explain correlation and calculate the return and risk of a two-asset portfolio
Describe the efficient frontier and the risk-return trade-off
Compare Ethiopian asset classes on return, risk, liquidity and rules, including FX limits on foreign assets
Draft an IPS and strategic asset allocation for an Ethiopian insurer

Built on

Erudite Africa course specification 2.d: Investment Analysis and Portfolio Management, Levels 1 and 2 (October 2026)
Erudite Africa Training Module: Ethiopian Context, programme overview and regulatory register (October 2026)
Capital Market Proclamation No. 1248/2021; ECMA Directives No. 980/2024 and No. 996/2024; ESX Rulebook (December 2024)
NBE directives as listed in the lessons: SBB/92/2024, SBB/95/2025, SBB/72/2019, FXD/01/2024, NBE/INT/13/2026; NBE Monetary Policy Committee release No. 7 (July 2026)
NBE financial sector data for FY2024/25 and ESX and ECMA market data, as compiled in Investopia sector research (October 2026)

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.