Exam 2 eqn

# Exam 2 eqn - Portfolio Risk σp= wA2σA2 wB2σB2...

This preview shows page 1. Sign up to view the full content.

FINA 3332 Exam 2 Equations Spring 2011 Chapter 5 Compounding more than one period a year FVn=PV1+inommmn Effective Rate of Interest ieff=1+inommm-1 Appendix 5a Continuous Compounding FV=PV ein PV=FV e-in Chapter 6 Expected Return r = j=1nrjpj Standard Deviation of Returns σ=j=1n(rj-r2pj ) Z-Tables z= Target Value –Expected ValueStandard Deviation Coefficient of Variation CV= σr Covariance , σA B = = ( , - )( , - j 1n rA j rA rB j )( ) rB pj Correlation ρA, B = σA, BσAσB Portfolio Return rp= i=1nwirj Portfolio Risk
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Portfolio Risk σp= wA2σA2+wB2σB2+2wAwBσA,B12 Relevant Risk: Systematic Risk βi=Covariancei,mVariancem Security Market Line kj=rf+βjrm+rf Beta of a Portfolio β p=j=1nwjβj Chapter 7 Valuing Finite-Maturity Bonds P0=t=1nI1+Kdt+M1+Kdn Perpetual Bonds P0=1Kd Zero Coupon Bonds P0=M1+Kdn Yield to Maturity Pm=t=1nI1+Kdt+M1+Kdn Preferred Stock P0=DPKp Asked Quote Pm = Face Value - \$ discount \$ discount = (Face)Quote100Days to maturity360...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• 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.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• 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.

Dana University of Pennsylvania ‘17, Course Hero Intern

• 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.

Jill Tulane University ‘16, Course Hero Intern