Optimal risky portfolio - Samenvattingen, Notities en Examens

Test Bank for Corporate Finance: A Focused Approach 8th Edition 8e by Michael C. Ehrhardt; Eugene F. Brigham. ISBN 4638 Full Chapters test bank included Chapter 1: An Overview of Financial Management and the Financial Environment 1-1 The Five-Minute MBA 1-2 Finance From 40,000 Feet Above 1-3 The Corporate Life Cycle 1-4 Governing a Corporation 1-5 An Overview of Financial Markets 1-6 Types of Claims on Future Cash Flows: Financial Instruments, Financial Assets, and Financial Sec 1-7...

CAPM Market Assumptions correct answers -All investors are price takers -All information relevant to security analysis is free and publicly available - All securities are publicly owned and traded - No taxes on investment returns -No transaction costs -Lending and borrowing at the same risk free rate are unlimited CAPM Investor Assumptions correct answers -Investors plan for the same (single-period) horizon -Investors are efficient users of analytical methods -> investors have homoge...

This document is up to date (2022-2023) and is a summary of the slides + notes + graphs of the Investment class (1st Master).

CFA Level 1 - 101 Must Knows 368 Questions with Verified Answers Addition Rule of Probability - CORRECT ANSWER ADDITION: P(A or B) = P(A) + P(B) - P(AB) Roy's Safety First Criterion - CORRECT ANSWER Safety First Ratio = (E(R) - Rₜ) / σ Larger ratio is better If (Rₜ) is risk free rate, then it becomes Sharpe Ratio Sharpe Ratio - CORRECT ANSWER Sharpe Ratio = (E(R) - RFR) / σ Larger ratio is better If (Rt) is higher than RFR, then it becomes Safety First Ratio Centra...

These are my lecture notes written out properly and in a summary for the exam of investments.

Essentials of Investments - Chapter 2,3,5,6,17 Updated Q & A 2024. marke, systematic, nondiversiable risk risk factors common to the whole economy unique, firm-specific, nonsystematic, diversiable risk risk that can be eliminated by diversification (4 names) investment opportunity set set of available portfolio risk-return combinations optimal risky portfolio the best combination of risky assets to be mixed with safe assets to form the complete portfolio efficien...

what is the goal of ERM? - to manage individual businesses within overall business portfolio what are the 4 benefits of active portfolio management? - 1. UNBUNDLING in terms of risk origination, retention, and transfer 2. RISK AGGREGATION across the whole company 3. setting RISK LIMITS & ASSET-ALLOCATION TARGETS 4. influencing TRANSFER PRICING, CAPITAL ALLOCATION, and INVESTMENT DECISIONS explain: UNBUNDLING in terms of risk origination, retention, and transfer - management can decide whe...

Most basic principle of CAPM - correct answer the prices out to be aligned to eliminate risk-free profit opportunities and predicts relationships among expected returns Market Portfolio - correct answer each security held in proportion to market value Assumptions - correct answer markets are competitive, equally profitable and investors are alike except for initial wealth, risk aversion Conditions that lead to CAPM ensure competitive security markets: - correct answer competitive and eq...

Capital asset pricing model (CAPM) - correct answer -Model that relates equilibrium expected return of a security to its risk measured by beta CAPM generates a benchmark return to - correct answer (1) evaluate possible investments (2) value assets that have not yet been traded Assumptions of CAPM - correct answer -Investors are price-takers -Holding...

What are two purposes of investment policy? - correct answer 1. To provide a foundation of goals, time horizons, and constraints on which the client portfolio is constructed 2. To provide a basis for review, performance evaluation, and adaptation to changing conditions. Why is a long term perspective essential as an element of investment policy? - correct answer The returns work better in the invest...