PPT-12 Return, Risk, and the Security Market Line

Learning Objectives Our goal in this ch 2 apter is to define risk more precisely and discuss how to measure it In addition we will quantify the relation between risk and return in financial markets. Portfolio Risk and Return: Part II. Presenter. Venue. Date. Formulas for Portfolio Risk and Return. EXHIBIT 6-1 Portfolio Risk and Return . Portfolio of Risk-Free and Risky Assets. Optimal Risky Portfolio. (chapter 8). Investment. returns. The rate of return on an investment can be calculated as follows:. . (Amount received – Amount invested). . Return =. . ________________________. . P.V. . Viswanath. A different perspective on the CAPM. We saw earlier why, intuitively, the CAPM should describe required returns.. We will see, in this chapter, the connection between the CAPM and individual investors’ construction of optimal portfolios.. The single-index model. Estimating the single-index model. Topic 3 (Ch. 8) . Index Models. 2. The success of a portfolio selection rule depends on the quality of the input list (i.e. the estimates of expected security returns and the covariance matrix). . MEANING. Security analysis is the analysis of tradeable financial instruments.. It involves examination and evaluation of various factors that can affect the prices of securities.. The role of a security analyst is to gather market information and advice the investors to adopt a suitable market strategy.. Corporate Finance. Presented by Dimitar Todorov. Capital Market Line. Capital market line (CML) shows graphically the relationship between risk measured by standard deviation and return of portfolios consisting of risk-free asset and market portfolio in all possible proportions.. By. Cheng Few Lee. Joseph . Finnerty. John Lee. Alice C Lee. Donald . Wort. Chapter . Outline. 7.1 RISK . CLASSIFICATION AND MEASUREMENT. 7.1.1 . Call Risk. 7.1.2 . Convertible Risk. 7.1.3 . Default Risk. By. Cheng Few Lee. Joseph . Finnerty. John Lee. Alice C Lee. Donald . Wort. Chapter Outline. 9.1 A GRAPHICAL APPROACH TO THE DERIVATION OF THE CAPM. 9.1.1 The Lending, Borrowing, and Market Portfolios. By. Cheng Few Lee. Joseph . Finnerty. John Lee. Alice C Lee. Donald . Wort. Chapter . Outline. 7.1 RISK . CLASSIFICATION AND MEASUREMENT. 7.1.1 . Call Risk. 7.1.2 . Convertible Risk. 7.1.3 . Default Risk. Dr. . Pravin. Kumar . Agrawal. Assistant Professor. Department of Business Management. PhD (Finance). T. h. a. t. . p. a. rt. . o. f. . i. n. c. o. m. e. . wh. i. c. h. . is. . n. o. t. . c. o. Module 5.4. Equilibrium risk pricing. Modules 2 and 3 largely followed the work of Markowitz.. Module 4 follows the work of Sharpe. . Sharpe was going after a “holy grail” of finance. He was trying to figure out how to identify over-priced and . Ch. 13. we have concentrated mainly on the return behavior of a few large portfolios. We need to expand our consideration to include individual assets. .. Specifically. , we have two tasks to accomplish. . by Philip H. . Dybvig. and Stephen A. Ross. Presented by Jane Zhao. Motivation. The . Sharpe ratio and Jensen's alpha are two measures that are commonly used in practice to evaluate portfolio . managers.. Professor Droussiotis. Chapter 1. What’s This?. Expected Value Line Growth (Return). EXIT. ENTRY. Initial. Investment. Risk-Free Rate. Expected Value Line Growth (Return). EXIT. ENTRY. Initial. Investment.