BUSI 408 Feb 28 - Portfolios standard deviation is a good...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
BUSI 408 Feb 28 16:30 No money to baby ACT     Increase contribution rate Stay in bonds Equity. How much? Strategy? Return=(Ending Price-Beginning price)/Beginning Price  Standard deviation  measure the risk Investors are risk averse. If the investment is riskier, people expect to gain higher return. For individual stock, we don’t see the trade-off between mean and standard  deviation.  Standard deviation is not a good measure of risk for individual stock.
Image of page 1

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

View Full Document Right Arrow Icon
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Portfolios, standard deviation is a good tool to measure risk When you hold a portfolios, standard deviation decreases Diversification, you are reducing idiosyncratic risk,( not all the risk) Going to equity Benefits: higher expected return; diversification(lower risk) Bad Things: potential huge lost; market timing(right time to enter market?) 16:30 16:30...
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