COMPARISON OF MARKET RISK ON MONGOLIAN FINANCIAL AND FOOD INDUSTRY: PORTFOLIO APPROACH

Abstract

Comparing to the Security Exchange Commission of the United Nations or other developed countries, the Mongolian Security Exchange is much younger, only 30 years of development. But in modern days, people's participation in the capital market is increasing year by year and it is crucial to decide which asset to invest for beginners. To determine less market risk-bearing industry, we used beta coefficient and portfolio construction approaches for the finance and food industry of Mongolia. 10 companies from the two industries were under consideration. As a result, we find that the conclusion can differ depending on the portfolio construction approach we use. Using the optimally weighted portfolio approach, the food industry bears more market risk than the finance industry in Mongolia. Beta coefficients are 0.5 and 0.25, respectively. For risk-averse investors, we recommend lower market risk portfolios such as finance industry