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

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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.
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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...
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This note was uploaded on 05/10/2011 for the course BUSI 408 taught by Professor Zeighamkhokher during the Spring '11 term at University of North Carolina School of the Arts.

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

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