the context of a portfolio‚ the risk of an asset is divided into two parts: diversifiable risk (unsystematic risk) and market risk (systematic risk). Diversifiable risk arises from company-specific factors and hence can be washed away through diversification. Market risk stems from general market movements and hence cannot be diversified away. For a diversified investor what matters is the market risk and not the diversifiable risk. (4)In general‚ investors are risk-averse. So‚ they want to be compensated
Premium Normal distribution Variance Investment
Risk and Return: Portfolio Theory and Asset Pricing Models Portfolio Theory Capital Asset Pricing Model (CAPM) Efficient frontier Capital Market Line (CML) Security Market Line (SML) Beta calculation Arbitrage pricing theory Fama-French 3-factor model Portfolio Theory • Suppose Asset A has an expected return of 10 percent and a standard deviation of 20 percent. Asset B has an expected return of 16 percent and a standard deviation of 40 percent. If the correlation between A and B is 0.6
Premium
a 58. You want your portfolio beta to be 1.20. Currently‚ your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You have another $400 to invest and want to divide it between an asset with a beta of 1.6 and a risk-free asset. How much should you invest in the risk-free asset? a. $0 b. $140 c. $200 d. $320 e. $400 ANALYZING A PORTFOLIO d 59. You have a $1‚000 portfolio which is invested in stocks A and B plus a risk-free
Premium Investment Rate of return Probability theory
method of taking revenge on his enemies is to degrade them socially and dominate them economically. The Marxist notion of ideology provides readers with a basis for perceiving Heathcliff’s behavior. Louis Althusser explains that “ideology represents the imaginary relationship of individuals to their real conditions of existence.”i He goes on to say that this imaginary reality is usually imposed on a population by a small group of people who use the false reality to oppress that population.ii In the
Premium Wuthering Heights Catherine Earnshaw
How Would You Describe Yourself? I am punctual‚ dependable and can be counted upon to finish what I start. I get a great deal of satisfaction from knowing that I have done something well and on time. For example‚ at my present job‚ I was given different work orders every day. It was my responsibility to finish the orders and make sure they all met quality and safety standards within a specific deadline. On occasion‚ I had to familiarize myself with the product and the production process. I was
Premium Problem solving Responsibility
The Risk - Return Relationship Another fundamental relationship in the study of finance is the relationship between expected return and the expected level of associated risk. The nature of the relationship is that as the level of expected risk increases‚ the level of expected return also increases. The opposite is true as well. Lower levels of expected risk are associated with lower expected returns. This RISK-RETURN RELATIONSHIP is characterized as being a direct relationship or a positive
Premium Risk Investment
Embedded Assessment 2.1 How would you feel if you lived in a dystopian society instead of living in modern day society? Today in the world there are places where people have freedom and books that have societies that are like today but very different. There can be societies in the world that can be like the books. Why are they different? Dystopian societies have more have more laws to control their society. Look and read the differences and similarities of a dystopian and modern day society
Premium Dystopia Science fiction Utopia
JOURNAL OF APPLIED MATHEMATICS AND DECISION SCIENCES‚ 8(4)‚ 201–218 Copyright c 2004‚ Lawrence Erlbaum Associates‚ Inc. The Relationship Between Stock Markets Of Major Developed Countries And Asian Emerging Markets WING-KEUNG WONG† Department of Economics‚ National University of Singapore JACK PENM Faculty of Economics and Commerce‚ Australian National University RICHARD DEANE TERRELL National Graduate School of Management‚ Australian National University KAREN YANN CHING LIM Department of Economics
Premium Stock market Developed country Stock market index
Punctuation Stories: Reviewing Mary Norris’s Grammatical Memoir If you’re looking for a good‚ quick memoir to read during the winter months and need to brush up on your commas and dashes‚ I highly recommend Mary Norris’s Between You & Me: Confessions of a Comma Queen. The book begins as a memoir‚ Norris explaining her journey from Ohio to Vermont to New York‚ along the way learning to drive a milk truck‚ package cheese‚ and eventually proof pieces for the New Yorker. It’s a good book on a number
Premium Fiction Short story Marriage
Risk and Return Assignment Questions 1. Suppose a stock begins the year with a price of $25 per share and ends with a price of $35 per share. During the year it paid a $2 dividend per share. What are its dividend yield‚ its capital gain‚ and its total return for the year? 2. An investor receives the following dollar returns a stock investment of $25: $1.00 of dividends Share price rise of $2.00 Calculate the investor’s total return. 3. Below are the probabilities for the economy’s five
Premium Stock Random variable Variance