Expected Monetary Value In a business environment‚ we frequently use probabilities to assess alternative financial decisions Example 1: A coin is tossed ten times. When a head is obtained‚ €4 is won. When a tail is obtained‚ €2 is lost Calculate the expected winnings. Outcome HEAD TAIL Winnings €4 -€2 Probability 0.5 0.5 Expected winnings in one toss: Expected Monetary Value (or just Expected Value (EV) = €1 Note: You never actually receive
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Why do Ads Target Children? Have you ever been in an isle of a store and heard‚ but mom I really want this I saw it on television? This is a product of advertising. Since the late 1980’s children have emerged as a key demographic to marketers. Advertisements selling everything from the latest video game to the newest automobile are now targeted to the youth of our world. Children have buying power that sways their parents’ purchases‚ and they are the future consumer. Marketing to children
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Target Case Study Be prepared to describe and critique Target’s capital budgeting system. Give specific consideration to the role of the real-estate managers and the makeup of the CEC. Target’s capital Budgeting System‚ by 2006‚ Target was targeting to create a lot of outlets and they were termed as projects‚ each project contains a set of procedures to be followed that are then approved by the CEC (capital Expenditure committee) in order to get the store up and running. There specific consideration
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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
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Return On investment CONTENTS INTRODUCTION 6 The ROI Concept 6 Simple ROI for Cash Flow and Investment Analysis 7 Competing Investments: ROI From Cash Flow Streams 7 ROI vs. NPV‚ IRR‚ and Payback Period 10 Other ROI Metrics 11 LIST OF TABLES Table 1 6 Table 2 7 Table 3 8 Table 4 8 Table 5 8 Table 6 ………………………………....................... 9 Table 7 ………………………………...................... 10 Return on Investment: What is ROI analysis? Return on Investment (ROI) analysis
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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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effective rate of return. Figure out the EAR% on T-note‚ and then compare with 5%‚ which is your opportunity cost of capital: Inputs: N = 270‚ PV=-$910‚ PMT=0‚ FV= $1000 Output: I/Y= 0.0349% EAR = EAR%=〖 (1+0.000349)〗^365 – 1 = 0.1358 =13.58% Cause 13.58% > 5%‚ so I will buy the T-note. You want to purchase a house: your maximum monthly payment is $1‚600‚ and you also have a saving of $35‚000 as the down payment. You apply for a 30-year fixed mortgage loan with APR 4.49%. What is the maximum
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independence from the laws and directives in the society he lived in. Equality 7-2521 has a hard time to find that he is an individual and to understand that life is meaningful. Once he realizes he is an individual‚ he realizes that he is beautiful and intelligent. Towards the end of the book‚ Equality 7-2521 has become a man and individualized himself completely only to realize that‚ that comes with independence. Equality 7-2521 started a war against the society he lived in. The people in the society
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MODELLING ABNORMAL RETURN: A REVIEW ARTICLE Oleh Norman Strong Overview Paper ini memberikan panduan untuk metodologi event study dan menguraikan prosedur pemodelan return abnormal dan masalah yang terkait. Event Study Event study adalah nama yang diberikan pada penelitian empiris atas hubungan antara harga sekuritas dengan kejadian ekonomi (economic events). Kebanyakan event study memfokuskan pada perilaku harga saham dalam rangka untuk menguji apakah perilaku stokastik mereka dipengaruhi oleh pengungkapan
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story‚ the gender roles seem to hold the shape. Usually we see the hero as a male that ventured out to the unknown and by some trial he matures and returns the respected head of the household. Women on the other hand‚ only leave their parent’s household when her father has found a husband that he feels suits the family the best. The woman is then expected to fill the needs and desires of her husband all the while maintaining the household chores. A pleasant breaking of this gender
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