October 2013
Beginner
608 pages
30h 22m
English
book
Introduction to Finance: Markets, Investments, and Financial Management, 15th Edition
by Ronald W. Melicher, Edgar A. Norton
Content preview from Introduction to Finance: Markets, Investments, and Financial Management, 15th Edition
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CHAPTER 12
Financial Returns and Risk Concepts
Chapter Learning Objectives...
AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO DO THE FOLLOWING:
- Know how to compute arithmetic averages, variances, and standard deviations using return data for a single financial asset.
- Understand the sources of risk.
- Know how to compute expected return and expected variance using scenario analysis.
- Know the historical rates of return and risk for different securities.
- Understand the concept of market efficiency and explain the three types of efficient markets.
- Explain how to calculate the expected return on a portfolio of securities.
- Understand how and why the combining of securities into portfolios reduces the overall or portfolio risk.
- Explain the difference between systematic and unsystematic risk.
- Understand the importance of ethics in investment-related positions.
Where We Have Been...
We know investors take their savings and direct it in various ways: some to bank accounts and some to stocks, bonds, or other investment vehicles. Investors direct their savings to various instruments by considering a number of factors: How safe is my money? Am I willing to risk a loss in hopes of achieving ...
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