Topic1 - TROY UNIVERSITY UNIVERSITY INVESTMENTS FIN 4432...

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TROY TROY UNIVERSITY UNIVERSITY INVESTMENTS INVESTMENTS FIN FIN 4432 4432 FALL SEMESTER 2011 FALL SEMESTER 2011
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RETURN Components of return Measuring return Sources of risk Measuring risk
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Components of return Two Components Yield--the income component, stated as dividend  yield (dividend / price) price change, also called the capital gain or loss;  the difference between beginning price and ending  price Total Return = Yield + Price Change Yield can be zero or positive Price change can be zero, positive or negative
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Measuring return Total Return percentage measure relating all cash flows on a security f or a given time period to its purchase price Total return =[CF t + (P E – P B )]/ P B where, CF t = cash flows during the measurement period t P E = price at the end of period t or sale price   P B = purchase price of the asset or price at the beginning of the period
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Arithmetic Mean vs. Geometric Mean
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This note was uploaded on 10/04/2011 for the course FINANCE FINANCE taught by Professor Don'tknow during the Spring '09 term at American Internation College.

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Topic1 - TROY UNIVERSITY UNIVERSITY INVESTMENTS FIN 4432...

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