{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 2 Terms - asset Beta Market risk premium Risk...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Paul Ramirez Chapter 2 List of Terms Return vs Risk: Finance theory assumes that a rational investor prefers to receive a higher percentage return on an investment to a lower return, and would rather accept less risk than more risk in earning that return. Mean reversion: The tendency for measures o performance such as percentage rates of return to revert to their historical averages. Efficient Capital Markets: A market that efficiently processes information. Capital Asset Pricing Model: Estimates the rate of return an investor should expect to receive on a risky
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: asset. Beta: Market risk premium: Risk Aversion: An investor prefers less risk to more risk. To a risk averse investor, the pain of losing a dollar is greater than the pleasure of winning a dollar. Simple average: Compound average: Time value of money: Time and the value of money are inversely related. Present value: Future value: Compounding: Discounting: Modern portfolio theory: Asset allocation: Efficient frontier: Systematic risk: Unsystematic risk: Diversification:...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern