TAILIEUCHUNG - Lecture Business finance - Chapter 7: Portfolio theory and asset pricing

In this chapter, students will be able to understand: Understand how ‘risk’ and ‘return’ are defined and measured, understand the concept of risk-aversion by investors, explain how diversification reduces risk, understand the importance of covariance between returns on assets in determining the risk of a portfolio,. | Chapter 7 Portfolio Theory and Asset Pricing 2 2 2 2 2 2 2 2 2 2 Learning Objectives Understand how ‘risk’ and ‘return’ are defined and measured. Understand the concept of risk-aversion by investors. Explain how diversification reduces risk. Understand the importance of covariance between returns on assets in determining the risk of a portfolio. 2 2 2 2 2 2 2 2 2 2 Learning Objectives (cont.) Explain the concept of efficient portfolios. Explain the distinction between systematic and unsystematic risk. Explain why systematic risk is important to investors. Explain the relationship between returns and risk proposed by the capital asset pricing model. 3 3 3 3 3 3 3 3 3 3 Learning Objectives (cont.) Understand the relationship between the capital asset pricing model and the arbitrage pricing model. Explain the development of the Fama–French three-factor model. 4 4 4 4 4 4 4 4 4 4 Return There is uncertainty associated with returns from shares. Assume we can assign probabilities .

• Tài chính doanh nghiệp
• Business finance
• Lecture Business finance
• Capital market
• Financial management
• Portfolio theory
• Asset pricing
• Sources of finance
• Leasing finance
• Sources of long term finance
• Long term finance
• Equipment finance
• Ordinary shares
• Long term debt
• Dividend Policy
• Capital structure
• Capital structure decisions
• Capital market efficiency
• Futures contracts
• Option markets
• Analysis of takeovers
• International financial management
• Management of short term assets
• Financial decisions
• Financial mathematics
• The time value of money
• Project evaluation
• Project evaluation methods
• Aasset pricing
• Financial intermediaries
• Sources of short term debt