Browsing by Author "Owusu-Agyeman, Prince"

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    Optimal Credit Portfolio Case Study :( First Allied Savings and Loans)
    (2011-06-20) Owusu-Agyeman, Prince
    With the recent onset of the global credit crisis and the growth of credit portfolio there have been an increased concentrations and credit portfolio volatility (unexpected losses), abysmal returns on risk and capital. The study sought to formulate and solve a linear programming model to maximize expected credit yield subject to capacity and demand, develop risk related scenarios and interpret results in the light of credit management issues. Data was obtained from the credit section of First Allied Savings and Loans Limited, Techiman, Ghana and was analyzed using the management scientist software to see how the portfolio fared in achieving its set targets in the contest of the LP model and to understand and quantify the credit characteristics of individual customer categories as well as compensate for risk level of the categories. The results obtained showed a positive relationship in general between the risk and the expected return of a financial asset. In other words, when the risk of an asset increases, so does its expected return.