11 10 28 Review Session 5 _Concept Review_

11 10 28 Review Session 5 _Concept Review_ - Individual...

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Unformatted text preview: Individual Stocks Portfolio Choice and Diversification CAPM (Individual Securities) CAPM (Portfolio) Cost of Capital Managerial Finance: Review Session 5 TA: Pablo Villanueva October 28, 2011 Individual Stocks Portfolio Choice and Diversification CAPM (Individual Securities) CAPM (Portfolio) Cost of Capital Agenda for Today 1. Individual Stock Expected Return Volatility Correlation with other Stocks 2. Portfolio Choice and Diversification Expected Return Volatility 3. CAPM (Individual Securities) Market Portfolio Beta 4. CAPM (Portfolio) Beta of a Portfolio 5. Cost of Capital Equity Cost of Capital Debt Cost of Capital Projects Cost of Capital Individual Stocks Portfolio Choice and Diversification CAPM (Individual Securities) CAPM (Portfolio) Cost of Capital Expected Return and Volatility Expected Return E [ R i ] = Prob ( Return 1 ) * Return 1 + Prob [ Return 2 ] * Return 2 Variance Var [ R i ] = Prob ( Return 1 ) * ( Return...
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This note was uploaded on 01/08/2012 for the course MS&E 245G taught by Professor Perez-gonzalas during the Fall '11 term at Stanford.

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11 10 28 Review Session 5 _Concept Review_ - Individual...

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