Chap012 - Chapter 18 Return, Risk, & the Security Market...

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Chapter 18 Slides 18-1 Fundamentals of Investments 18-2 18-3 Expected and Unexpected Returns 18-4 Announcements and News 18-5 Systematic and Unsystematic Risk 18-6 18-7 Diversification and Risk 18-8 The Systematic Risk Principle 18-9 Measuring Systematic Risk 18-10 Measuring Systematic Risk 18-11 Work the Web 18-12 Portfolio Betas 18-13 Beta and the Risk Premium 18-14 Beta and the Risk Premium 18-15 Beta and the Risk Premium 18-16 The Reward-to-Risk Ratio 18-17 The Basic Argument 18-18 The Basic Argument 18-19 The Basic Argument 18-20 The Basic Argument 18-21 The Fundamental Result 18-22 The Fundamental Result 18-23 The Fundamental Result 18-24 The Security Market Line 18-25 The Security Market Line 18-26 The Security Market Line 18-27 The Security Market Line 18-28 The Security Market Line 18-29 The Security Market Line 18-30 A Closer Look at Beta 18-31 A Closer Look at Beta 18-32 A Closer Look at Beta 18-33 Where Do Betas Come From? 18-34 Where Do Betas Come From? 18-35 Why Do Betas Differ? 18-36 Chapter Review 18-37 Chapter Review 18-38 Chapter Review 18-39 Chapter Review
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A-150 Chapter 18 Chapter Organization 18.1 Announcements, Surprises, and Expected Returns A. Expected and Unexpected Returns B. Announcements and News 18.2 Risk: Systematic and Unsystematic A. Systematic and Unsystematic Risk B. Systematic and Unsystematic Components of Return 18.3 Diversification, Systematic Risk, and Unsystematic Risk A. Diversification and Unsystematic Risk B. Diversification and Systematic Risk 18.4 Systematic Risk and Beta A. The Systematic Risk Principle B. Measuring Systematic Risk C. Portfolio Betas 18.5 The Security Market Line A. Beta and the Risk Premium B. The Reward-to-Risk Ratio C. The Basic Argument D. The Fundamental Result E. The Security Market Line 18.6 More on Beta A. A Closer Look at Beta B. Where do Betas Come From? C. Why do Betas Differ? 18.7 Summary and Conclusions Selected Web Sites 0. http://finance.yahoo.com
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Return, Risk, and the Security Market Line A-151 Annotated Chapter Outline 18.1 Announcements, Surprises, and Expected Returns A. Expected and Unexpected Returns The return on a security is represented by: Total return - Expected return = Unexpected return or R - E(R) = U Where the average value of the unexpected return is zero.
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This note was uploaded on 08/12/2009 for the course FIN 315 taught by Professor Wheeler during the Spring '09 term at Loyola New Orleans.

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Chap012 - Chapter 18 Return, Risk, & the Security Market...

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