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Final_Exam_StudyGuide

# Final_Exam_StudyGuide - = w w 2 ww;wher-1 1 2 22 22 p a a b...

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Average Arithmetic 1 - N T - N Average Geometric 1 - N 1 - T R(T) - x Z 1] [-1, where ; 2 , 2 2 2 2 2 × + × = = + + + = σ μ ρ ρ σ σ σ σ σ b a b a b a b b a a p w w w w

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( 29 ( 29 [ ] ( 29 ( 29 ( 29 [ ] Capital gain / loss = P P Total dollar return = Dividend income + capital gain / loss Total cash if stock is sold = Initial investment + total return Dividend yield = D P Capital gains yield = P P P Variance = = x x N -1 Variance = = x x p ; where p is the probability of state i occuring Standard deviation = = Variance Geometric average return = 1+ R 1+ R 1+ R ending beginning 1 0 t+1 t t 2 i i=1 N 2 i i i=1 N i 1 2 T - - - - - σ σ σ 2 2 1 1 * * * ..... * T ( 29 ( 29 [ ] ( 29 E(R) = (p R ; (where p is the probability of state i occuring) E(R [x E(R ; where x is the fraction / percentage of the portfolio invested in stock i. Total Return = Expected return + Unexpected return Total Return = Expected return + [(Systematic portion) + (Unsystematic portion)] [x ; where x is the fraction / percentage of the portfolio invested in stock i. Reward - to - risk ratio = E R R Risk premium = E R R E R R i i i=1 N i p i i i=1 N i p i i i=1 N i i
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Final_Exam_StudyGuide - = w w 2 ww;wher-1 1 2 22 22 p a a b...

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