FIN 320F
06/02/2008 11:13:00
Risk-free rate of interest = whatever the government is paying Factors that influence the risk free rate Know what causes increase and decrease (tighten/loosen Foreign Trade Deficits trading of stuff with foreign co
Portfolio Theory and Asset Allocation
FI 312 - Li
Portfolio Theory and Asset Allocation
1
Introduction
One of the first decisions we need to make is how much to invest
in risky assets, and how much to leave in relatively safer, or
riskless, assets
This is
1/30/08 Video Info - SEC Kow what the SEC is all about - Short Selling - Margin Trades (most important factor in the crash of 29) - Bulls think stock prices will rise - Bears think stock prices wil fall - DOW Jones Industrial Average = index of th
Finance 320F Foundations of Finance
Appendix B: Key Equations
Ross, Westerfield, Jaffe, Essentials of Corporate Finance
Chapter 2
1
1
1
where
1
Cash flow from assets = Operating cash flow (OCF) Net capital spending Change in net working
capital (NWC)
o
(1
LESSON 1
One of the most important aspects of running any organization is having sufficient liquidity.
In the book: Chapter 3, section 3.1, 3.2
Our first information system is accounting. Accounting looks back at what has
happened and records it in a f
INTROCUCTION
This unit is the pivotal one in our course. It is what we've been building up to, and it will be the
foundation for all of the work in the subsequent units. We've established a goal for ourselves, both
personally and professionally, in our w
Formulas for Exam 1, FI 312, Fall 2016
The mean or expected value of an random variable X is the weighted average of all possible outcomes, where the weights are the probabilities of those outcomes:
= E(X) = x1 P r(x1 ) + . + xn P r(xn ) =
n
X
xi P r(xi
Problem Set 2, Due September 29
FI 312, Fall 2016
Prof. Sophia Zhengzi Li
1. Suppose that there are many stocks in the security market and that the characteristics
of stocks A and B are given as follows:
Stock Expected Return
A
10%
B
20%
Correlation=-1
St
Problem Set 2, Due September 29
FI 312, Fall 2016
Prof. Sophia Zhengzi Li
1. Suppose that there are many stocks in the security market and that the characteristics
of stocks A and B are given as follows:
Stock Expected Return
A
10%
B
20%
Correlation=-1
St
Problem Set 3, Due October 18
FI 312, Fall 2016
Prof. Sophia Zhengzi Li
1. What is the key underlying assumption of the single index model?
Solution: The co-movements between different assets are driven by the aggregate
market.
2. The betas and variances
Problem Set 1, Due September 15
FI 312, Fall 2016
Prof. Sophia Zhengzi Li
Properties of Random Variables
The mean or expected value of an random variable X is the weighted average of all
possible outcomes, where the weights P
are the probabilities of tho
Problem Set 1, Due September 15
FI 312, Fall 2016
Prof. Sophia Zhengzi Li
Properties of Random Variables
The mean or expected value of an random variable X is the weighted average of all
possible outcomes, where the weights P
are the probabilities of tho
Portfolio Theory and Asset Allocation:
Some Practical Considerations
FI 312 - Li
Portfolio Theory and Asset Allocation in Practice
1
Dimensionality
In the US there are literally tens of thousands of traded securities
, Clearly, we cannot solve the MV opti
Simple Linear Regression
PIM 850 Fall 2012 WMBA Program Broad College of Business
Michigan State University
Slide 1
Simple Linear Regression
Managerial decisions often are based on the
relationship between two or more variables.
Regression analysis can