Skip to content
Erudite AfricaCenter of Excellence
← Investment Analysis and Portfolio Management

Portfolio theory, asset pricing and fixed income risk

Module 04 / 5 · 70 min

Optimise a constrained portfolio, estimate the cost of equity for Ethiopia with short histories, and manage interest rate and credit risk in Birr bonds and sukuk.

In this module you will learn to

  • Set up a mean-variance optimisation in a spreadsheet with Ethiopian regulatory constraints
  • Apply CAPM, estimate beta from short ESX histories and build a cost of equity with a country risk premium
  • Calculate duration, modified duration and convexity and estimate the effect of an NBR change
  • Assess credit spreads, covenants and security, and explain sukuk structures for interest-free investors

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.