{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

4-16-08 (ch10) - risk Market risk – economy wide risk...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
4/16/2008 Notes CH10 Percentage return (%) = (capital gain (loss) + dividend) / initial share price For stock = (P1- P0) / P0 + Div / P0 Nominal vs. real 1+ real rate of return = 1+ nominal rate of return / 1+ inflation rate Expected return = interest on treasury bills + risk premium Variance – average value of squared deviations from the mean - measures volatility Diversification – strategy designed to reduce risk by spreading your investment over (across) many investments Unique risk could be eliminated – risk factors that affect a specific stock (Diversifiable
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: risk) Market risk – economy wide risk that affects a entire market (Non diversifiable risk or systematic risks) Portfolio rate of return = (fraction of portfolio in 1 st asset class * rate of return on 1 st asset class) + (fraction of portfolio in 2nd asset class * rate of return on 2nd asset class)-could be more than 2 CH 10 questions for early bird points Due 4-21-08...
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