PowerPoint Presentation

PowerPoint Presentation

Define the following terms, using graphs or equations to illustrate your answers where feasible.

Define the following terms, using graphs or equations to illustrate your answers where feasible.

· Risk in general; stand-alone risk; probability distribution and its relation to risk

· Expected rate of return,

· Continuous probability distribution

· Standard deviation, σ; variance, σ2

· Risk aversion; realized rate of return, r

· Risk premium for Stock i, RPi; market risk premium, RPM

· Capital Asset Pricing Model (CAPM)

· Expected return on a portfolio, r^p; market portfolio

· Correlation as a concept; correlation coefficient, ρ

· Market risk; diversifiable risk; relevant risk

· Beta coefficient, b; average stock’s beta

· Security Market Line (SML); SML equation

· Slope of SML and its relationship to risk aversion

· Equilibrium; Efficient Markets Hypothesis (EMH); three forms of EMH

· Fama-French three-factor model

· Behavioral finance; herding; anchoring

Business School Assignment Instructions

Answer preview Define the following terms, using graphs or equations to illustrate your answers where feasible.

APA

1287 words

Open chat
Hello
Contact us here via WhatsApp