RSM 330 - Tutorial 2 - Oct 6

RSM 330 - Tutorial 2 - Oct 6 - RSM 330 Investments Tutorial...

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RSM 330 Investments Tutorial 2 – October
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Plan for today Market news – the bulls are running Review of topics Asset Allocation Practice problems Hockey night in Canada
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Market News Last week I said it was scary out there – is it still? A week of optimism in Europe – should there be? What’s changed this week? Big bad employment numbers tomorrow morning…
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More charts… Charts courtesy of the Daily Roll: http://individual.utoronto.ca/parrent/DailyRoll
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Quick Stats Review
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Asset Allocation How should I divide my investment? Safe assets vs. Risky assets What is my outlook for the economy? What kind of risk tolerance do I have? What asset classes are available?
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The Capital Allocation Line (CAL)
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Capital Allocation Line (Cont.) The decision becomes: How much in a Risk-Free asset How much in the optimal portfolio 12.1%  S  (standard deviation)  E   (expected return)  Capital Allocation Line (CAL) 7.9% T-Bill Optimal Portfolio
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So… How much? Depends on many things
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This note was uploaded on 10/21/2011 for the course RSM 330 taught by Professor Stapleton during the Fall '11 term at University of Toronto.

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RSM 330 - Tutorial 2 - Oct 6 - RSM 330 Investments Tutorial...

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