Lesson6 - some are tax free => r t (1-t) = r tf...

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Lesson 6: Choosing  among financial assets:  the principles of portfolio  selection. In this lesson we will review the types of financial assets available and discuss briefly the principles which guide their selection as part of a portfolio of assets. Suggested reading: RSU chapter chapters 7, 8, 12 and 13
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Important Distinctions Public versus private markets – government versus non-government Direct versus indirect finance Primary versus secondary markets Money versus capital markets – more or less than one year
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Types of Financial Assets U.S. government securities – bills (less than 1yr.), bonds (more than 10 yrs.) and notes (1 to 10 yrs.) U.S.government agency securities State and local government bonds (state, county and municipal)
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Unformatted text preview: some are tax free => r t (1-t) = r tf Money (transactions deposits), federal funds RPs and eurodollars, savings and other time deposits and CDs and NCDs Corporate bonds and commercial paper Corporate stocks (NYSE, NASDAQ, AMEX, etc.) Residential mortgages (use property as collateral) Commercial and farm mortgages (use property as collateral) Mutual fund assets (load, no load, closed end, open end, money market and general) Cu Rates of Return on Financial Assets Risk and Return Risk and return - Risk and probability Risk aversion Diversification Systematic (market) risk and non- systematic risk Selecting Financial Assets and...
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Lesson6 - some are tax free => r t (1-t) = r tf...

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