Class notes
Finance Notes #3
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Uploaded on
02-06-2023
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Risk and return are intrinsically linked in the world of finance. Investments with higher risk tend to yield higher returns, but this relationship also carries the potential for greater losses. Diversification plays a vital role in managing risk. By spreading investments across different asset classes, industries, and geographic regions, you can potentially reduce overall risk exposure. The Capital Asset Pricing Model (CAPM) helps assess an investment's expected return based on its risk relative to the overall market. It considers the risk-free rate, market risk premium, and the asset's beta.
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Institution
University Of Wisconsin - Eau Claire
Course
Fin 320 (FIN320)
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Document information
- Uploaded on
- June 2, 2023
- Number of pages
- 6
- Written in
- 2022/2023
- Type
- Class notes
- Professor(s)
- Anonymous
- Contains
- All classes
Subjects
- total dollar returns
- percentage returns
- adjusting for inflation
- arithmetic averages
- geometric averages
- risk premiums
- expected returns
-
capm
-
portfolios
-
portfolio expected return
-
beta
-
wacc
-
market values
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