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Unformatted text preview: diversification. Unsystematic risk: the proportion of risk of individual assets that can be eliminated through diversification What really matters is systematic risk. how a group of assets move together. Risk and Return Revisited For the various asset classes, a trade-off arises between risk and return. The Trade-off Between Risk and Return The Power of Diversification Summary Group 10 Financial Management Investment performance is measured by total return. Trade-off between risk and return for assets: historically, stocks have higher returns and volatility than bonds and bills. One measure of volatility: standard deviation Systematic risk: risk that cannot be eliminated through diversification...
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This note was uploaded on 08/14/2011 for the course ECON 103 taught by Professor Profkinney during the Spring '11 term at Athens Tech.
- Spring '11