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Unformatted text preview: Financial market history Two types of risk: 1) general economic risk 2) industry and firm specific risk Risk measurement: standard deviation, variance Calculate expected return, variance, and standard deviation from probability distribution and historical data Risk and return for portfolios Diversification Portfolio expected return, variance and standard deviation Chapter 7 The CAPM RWJ Chapter 13.6-9 Economy-wide risk vs. firm specific risk Risk for a well-diversified portfolio Beta of a stock (zero beta, negative beta) CAPM SML Chapter 9 Cost of Capital RWJ Chapter 15.1-15.5 Cost of equity, debt, preferred stocks WACC Project beta Project beta vs. overall firm beta Divisional beta...
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This note was uploaded on 08/16/2011 for the course MGMT 109 taught by Professor Zheng during the Winter '11 term at UC Irvine.
- Winter '11