Outline for today1. About the course.2. Financial investments.3. Returns.http://econ.berkeley.edu/~szeidl/ec136/ec136index.htmReadings for this week: BKM Chapters 1-2.
1.This course focuses on questionslike1. How much do stocks earn relative to bonds, andwhy?2. Why do some stocks earn higher returns than oth-ers?3. What explains °uctuations in security prices?4. How should we invest our ±nancial wealth?5. What are the uses of derivative securities like op-tions?
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1000150020002500Nominal stock and bond performance 1926-2008Stock indexGov't bond index05001926192919321935193819411944194719501953195619591962196519681971197419771980198319861989199219951998200120042007