is derived? The line of possible portfolio risk and return combinations given the risk-free rate‚ risk and return of a portfolio of risky assets is referred to as the capital allocation line (CAL). A simplifying assumption underlying modern portfolio theory is that investors have homogeneous expectations‚ i.e.‚ they all have the same estimates of risk‚ return‚ and correlations with other risky assets for all risky assets. Under this assumption‚ all investors face the same efficient frontier of
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In 1939‚ a vision was put into motion with the creation of the atomic bomb. The atomic bomb was going to be the answer to the end of World War II and the final factor that would solidify the United States as a true superpower. With the creation of the atomic bomb‚ no one would stand in the way of the United States. The United States became the "New Rome‚" and with the power of the Atomic Bomb behind them‚ no other nation stood in their way. "My God‚ what have we done?" - Robert Lewis‚ the co-pilot
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HEC Paris Financial Markets Spring 2012 Final Exam “Cheat Sheet” 0. Basic Statistics (a) Consider an n-outcome probability space with probabilities p1 ‚ p2 ‚ . . . ‚ pn . Consider two discrete random variables X and Y with outcomes (X1 ‚ X2 ‚ . . . ‚ Xn ) and (Y1 ‚ Y2 ‚ . . . ‚ Yn ). 2 The we have the following formulas for means (µX ‚ µY )‚ variance (σX )‚ standard deviation (σX )‚ covariance (σX‚Y )‚ and correlation (ρX‚Y ) µX = EX = E(X) = p1 X1 + p2 X2 + · · · + pn Xn µY = EY = E(Y ) =
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SUMMER INTERNSHIP REPORT ON Portfolio Management AT JINDAL STAINLESS STEEL Ltd. HISAR |[pic] | | | |[pic] | A Report Submitted in Partial fulfillment of the requirements For the Award of the degree of POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT From J K Business School
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Powerline Network Corporation—Case Two: Risk and Return Thomas Calderone‚ CJ Anderson‚ and Megan Wegener FIN 480: Finance Capstone Course Professor Randy Lewis Spring Arbor University February 7‚ 2013 Powerline Network Corporation: Risk and Return Introduction The topics of risk and return are crucial to financial management because it allows a company to maximize stock value—in which risk is a determinant value‚ the rate of return in which investors require on various types of securities
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first country to use an atomic bomb on another country‚ and the U.S. is still the only country to have ever used an atomic bomb. The U.S. dropped the atomic bomb on Hiroshima‚ Japan on August 6‚ 1945 and dropped another atomic bomb on Nagasaki‚ Japan on August 9‚ 1945. 70‚000 died instantly in Hiroshima and 80‚000 died instantly in Nagasaki. Even though the U.S. destroyed many Japanese lives the atomic bombing of Hiroshima was the right decision. However dropping the second atomic bomb on Nagasaki was
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should‚ on average‚ over time provide a higher return than investing in fixed-interest securities. a. True b. False 2. Investments through a stock exchange are limited to ordinary shares issued by listed corporations. a. True b. False 3. Portfolio theory contends that a diversified share portfolio enables an investor to significantly reduce the portfolio’s exposure to systematic risk. a. True b. False 4. A share that has a beta of one is twice as risky as an average share listed on a stock market
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results from its application throughout a narrative literature review. Second the paper has argued that to claim whether the CAPM is dead or alive‚ some improvements on the model must be considered. Rather than take the view that one theory is right and the other is wrong‚ it is probably more accurate to say that each applies in somewhat different circumstances (assumptions). Finally it’s argued that even the examination of the CAPM’s variants is unable to solve the debate into the model. Rather
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Topic 5: Risk and Return Learning Outcomes introduction to risk and return expected return and risk on individual asset expected return and risk on portfolio systematic and unsystematic risk diversification capital asset pricing model (CAPM) and the security market line Risk and Return M K Lai Page 2 Introduction to Risk and Return finance can be complicated‚ but it can be reduced to three basic concepts cash flows Risk and Return time value of money risk
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(1)Financial assets are expected to generate cash flows and hence the riskiness of a financial asset is measured in terms of the riskiness of its cash flows. (2)The riskiness of an asset may be measured on a stand-alone basis or in a portfolio context. An asset may be very risky if held by itself but may be much less risky when it is a part of a large portfolio. (3)In the context of a portfolio‚ the risk of an asset is divided into two parts: diversifiable risk (unsystematic risk) and market risk
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