...Foundations of Finance: The Capital Asset Pricing Model (CAPM) Prof. Alex Shapiro Lecture Notes 9 The Capital Asset Pricing Model (CAPM) I. II. III. IV. V. VI. Readings and Suggested Practice Problems Introduction: from Assumptions to Implications The Market Portfolio Assumptions Underlying the CAPM Portfolio Choice in the CAPM World The Risk-Return Tradeoff for Individual Stocks VII. The CML and SML VIII. “Overpricing”/“Underpricing” and the SML IX. X. Uses of CAPM in Corporate Finance Additional Readings Equilibrium Process, Supply Equals Demand, Market Price of Risk, Cross-Section of Expected Returns, Risk Adjusted Expected Returns, Net Present Value and Cost of Equity Capital. Buzz Words: 1 Foundations of Finance: The Capital Asset Pricing Model (CAPM) I. Readings and Suggested Practice Problems BKM, Chapter 9, Sections 2-4. Suggested Problems, Chapter 9: 2, 4, 5, 13, 14, 15 Web: Visit www.morningstar.com, select a fund (e.g., Vanguard 500 Index VFINX), click on Risk Measures, and in the Modern Portfolio Theory Statistics section, view the beta. II. Introduction: from Assumptions to Implications A. Economic Equilibrium 1. Equilibrium analysis (unlike index models) Assume economic behavior of individuals. Then, draw conclusions about overall market prices, quantities, returns. 2. The CAPM is based on equilibrium analysis Problems: – – There are many “dubious” assumptions. The main implication of the CAPM concerns expected returns...
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...Chapter 1 Competing with Operations Foundations of Operations Management, Ritzman & Krajewski © What Is a Process? • Process – Activities that transform inputs, add value and generate output(s) • Examples: – Manufacturing process • Furniture manufacturing: cutting or staining wood – Non-Manufacturing Process • Checking in passengers Foundations of Operations Management, Ritzman & Krajewski © 1-2 Processes & Operations Internal and external customers Inputs • • • • • • • • Workers Managers Equipment Facilities Materials Services Land Energy Processes and operations 1 3 5 2 4 Outputs • Services • Goods Figure 1.1 Information on performance 1-3 Foundations of Operations Management, Ritzman & Krajewski © Nested Processes at a Large Bank BANK Operations Cash Management Loan operations Trading operations Others ATM Support Customer transactions Service quality Others Maintain Cards Research problems Site analysis Others Retail Distribution Compliance Finance Human resources Teller Line Transactions Track branch sales ATM hotline Others Process Deposits Cash checks Safe deposit boxes Others Products Auto Finance Cards Mortgages Others Credit Applications Manage retail products Originate lease portfolio Others Loan Documentation Review credit standing Obtain manager approval Others Wholesale Trading Loan administration Leasing Others Fund Management Market making spot Dealer support Others Prepare Reports Attend meetings...
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...This is a sample of the instructor resources for Louis C. Gapenski, PhD, Fundamentals of Healthcare Finance, Second Edition. The complete instructor resources include Test Bank PowerPoint slides Sample course syllabus Solutions to the end-of chapter questions and problems Solutions to the online cases This sample includes the following resources for Chapter 2: Answers to end-of-chapter discussion questions PowerPoint slides If you adopt this text, you will be given access to the complete materials. To obtain access, email your request to hapbooks@ache.org and include the following information in your message: Book title Your name and institution name Title of the course for which the book was adopted and season course is taught Course level (graduate, undergraduate, or continuing education) and expected enrollment The use of the text (primary, supplemental, or recommended reading) A contact name and phone number/e-mail address we can use to verify your employment as an instructor You will receive an e-mail containing access information after we have verified your instructor status. Thank you for your interest in this text and the accompanying instructor resources. Copyright and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com Healthcare Business Basics Chapter 2 8/1/12 ANSWERS TO END-OF-CHAPTER QUESTIONS 2.1 a. A business is an entity that obtains financing from the...
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...Limited, One Bank Limited and Mutual Trust Bank Limited. The study specifically focused on the extent to which companies practicing CSR complied with basic legal labor standards involving their employees and my marking 0 and 1 (0 for Null for practicing CSR,1 for CSR Practice). The study involved identification of companies providing CSR, obtaining information about the details of the CSR practices adopted at these companies (though looking at their website and interviews few of employees) and an assessment of how well these companies complied with basic CSR standards. The research found that most CSR practicing companies practiced CSR in their own specific way. It was often unclear how much money companies spend on CSR and it also found that many of these companies, whilst providing CSR, did not comply with the law in providing basic labor standards to their employees. The study also showed the comparison among these three banks with graph where graphical technique is informative in the field of statistics used to visualize quantitative data. Statistics and data analysis procedures generally yield their output in numeric or tabular form; graphical techniques allow such results to be displayed in some sort of pictorial form. Chapter 1 Introduction 1. Introduction: Business houses, right from the inception of human race, have been regarded as constructive partners in the communities in which they operate. Though they have been instrumental in creating employment,...
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...Foundations for Financial Success Volume 1, Issue 1, March 3, 2011 TABLE CONTENTS OF What is financial literacy and why is it important? Financial literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being. More specifically, it refers to the set of skills and knowledge that allow an individual to make informed and effective decisions through their understanding of finances. Financial literacy involves a number of different areas of understanding. Learning about money and how it works is an important aspect, as well as understanding products like credit, loans, and investments. Competency in managing money appears to be a skill that doesn’t come naturally to everyone. Unless a person is exposed to the practice of money management, he/she is less likely to understand how it works and it long-term benefits. Without a financial education, it is easy to develop poor spending and financial habits resulting in significant negative consequences such as a poor credit rating, denial of credit, rejection for a checking account and bankruptcy, to name a few. Early financial literacy is the best way to prevent such consequences. In essence, personal financial literacy is much more than managing and investing money. It also includes making all the pieces of your financial life fit together. Achieving Financial Success you must understand and determine where your money goes. Here’s how you can start: Analyzing...
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...FACULTY OF BUSINESS AND HUMANITIES ONLINE CLASS REGISTRATION [OCR] – SEMESTER 1, 2016 (As at November 2016) Registration for a tutorial class via OCR is considered as confirmed registration. However, if a student fails to attend the first tutorial, the Unit Leader/Lecturer has the discretion to allocate that seat to another student. The student will then have to see the Unit Leader/Lecturer concerned to register for another tutorial. A. Online class registration is only available to students who have fulfilled the following : (i) (ii) (iii) (iv) Have completed the re-enrolment process. Have not made changes to their enrolment. Have made FULL payment before or on 19 February 2016. Have been approved full (100%) scholarship or loan recognized by the University. Students who have met the above criteria will be able to do their online registration starting 9.30am on 22 February 2016 until 26 February 2016. The software works on IE7 or Firefox only. The last date to do the OCR is on Friday, 26 February by 2.00pm. MANUAL CLASS REGISTRATION only opens on 25 February from 9.00am to 5.00pm at GP3-106. Registration will be based on a first come first serve basis. B. Students WILL NOT be able to do their tutorial class registrations via the OCR if: (i) There are time clashes in the timetable. (ii) There are any add or drop unit enrolment done; the amendments will not be captured in the OCR. (iii) There are unit problems, e.g. changes in course structure or major. Please consult the...
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...Income and revenue are fresh blood for organizations regardless of governments, private sectors or nonprofits. The studies of the income sources, where the money goes and how the money is spent in nonprofit are essential to help finance managers and leaders understand how the organization operated in the context of current economic situation and to give a general quantitative analysis in terms of activities and programs executed by organizations. Knowing how finance and budget management looks like in nonprofits is also key to distinguish with for- profit organizations. This critique will start with the functions of finance management in the nonprofits and why we need to be prudent to make fiscal decisions, then I will focus on the diversification...
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...How faith integration manifests itself within the practice of corporate finance can only be understood when studying God's Word and practicing its teachings. One important aspect of integrating one’s faith within the context of finance is through stewardship. Stewardship is defined as;"1. the position and duties of a steward, a person who acts as the surrogate of another or others, especially by managing property, financial affairs, an estate, etc. 2. the responsible overseeing and protection of something considered worth caring for and preserving" (Dictionary.com, 2012). Stewardship in the context of faith integration is the act caring for and protecting the resources that God has entrusted us with and using them in a way that will bring Him glory and help to build up God’s kingdom (Porter, 2006, p. 817). This has an immediate inference to financial interactions. Luke 12:42(NKJV) states; “And the Lord said, “Who then is that faithful and wise steward, whom his master will make ruler over his household, to give them their portion of food in due season?” This passage of scripture continues in verses 43 and 44 to discuss how blessed that servant will be and how he will be made ruler over all that the possessions the master has. The individuals working in the field of finance who do their job well, will also be rewarded and/or compensated. When examining the goals and governance of the corporation, as well as, the financial markets and institutions, there are a number of individuals...
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...Accredited Tertiary Courses Listing 2012 Accredited Tertiary Courses Listing 2012 – as at 26 September 2012 1 2012 Accredited Undergraduate Courses AUSTRALIAN CAPITAL TERRITORY The Australian National University University of Canberra NEW SOUTH WALES Australian Catholic University Australian Institute of Higher Education Avondale College Charles Sturt University Kings Own Institute Macquarie University Southern Cross University Top Education Institute The University of New England The University of New South Wales The University of Newcastle The University of Sydney University of Technology, Sydney University of Western Sydney University of Wollongong Williams Business College NORTHERN TERRITORY Charles Darwin University QUEENSLAND Australian Catholic University Bond University Central Queensland University Christian Heritage College Griffith University James Cook University Queensland University of Technology The University of Queensland The University of Southern Queensland University of the Sunshine Coast SOUTH AUSTRALIA Flinders University Kaplan Business School The University of Adelaide University of South Australia Open Universities (conferred by Uni of SA) TASMANIA University of Tasmania VICTORIA Australian Catholic University Cambridge International College Carrick Higher Education Deakin University Holmes Institute Holmesglen Institute of TAFE La Trobe University Melbourne Institute of Technology Monash University Northern Melbourne Institute of TAFE RMIT...
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...Final Project Managerial Finance July 1, 2012 ABSTRACT This essay will provide a scriptural key to understanding the topics of finance in a Christian worldview perspective. The illustrations will be reflected through the events found in God’s word, providing a greater understanding into the relevance of the Bible in today’s economic world. It will show the importance of the integration of faith, as God has provided his wisdom for today in the illustrations of the Holy Word. Refer to II Timothy 3: 16 – 17; “All scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness, so that the servant of God may be thoroughly equipped for every good work” (NIV, 2005), to understand that God’s word continues to apply today as it has maintained strength and reference to aspects of life and development. The topic of finance is addressed throughout the scriptures with suggestions for the proper practice. It is clear in the study of his word that finance is a part of the structural design that is to provide for the development of humankind and the world. INTRODUCTION TO FINANCE Stewardship How faith integration manifest itself within the practice of corporate finance can only be found when studying God's word within the Holy Bible and practicing its teachings. One important aspect of integrating ones faith within the context of finance is through stewardship. Stewardship...
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...Sefton Programme Directors of the MSc Finance Suite of programmes Imperial Facts & figures Founded 1907 Students from 126 countries Taught courses 242 Imperial Research Assessment Exercise 2008 (% 4* and 3*) 1 Imperial College London 72.9% 2 University of Cambridge 71.2% 3 University of Oxford 70.3% 4 London School of Economics 68.4% 5 University College London 65.8% 6 University of Manchester 65.4% 7 University of Warwick 64.9% 8 University of Essex 62.9% 9 University of Edinburgh 62.8% 10 Queen Mary, University of London 62.6% Business School Rank 1 2= 2= 5= 5= 5= 9= 9= 9= RAE 2008 Business & Management London Business School Imperial College London Cardiff University University of Bath London School of Economics University of Oxford Cranfield University Lancaster University University of Warwick %4* and 3* 85% 85% 70% 70% 70% 70% 70% 65% 75% 75% FT = 2 Rankings of Pre-experience MSc in Finance (June 2014) University of Cambridge 75% Refers to 2010 – 11 intake 5= ImperialKing's College LondonWorld and 3rd in UK Business School 16th in Rank based on 4* only Suite of Finance programmes • The average acceptance rate is around 11%. • In terms of selectivity the finance programmes are top in the Business School and in the top 10% of Imperial College. Business School • Exciting year to join Business School -Growing School under our new Dean Professor G. ‘Anand’ Anandalingam -Two new MSc Finance Programmes Finance and Accounting Investment and Wealth...
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...Financial Understanding FIN 100 Professor Murphy August 26, 2012 Financial Understanding As a business owner, financial understanding is a must. Small businesses typically finance their operations differently than large corporations. Many small businesses must rely on the personal resources and credit history of the firm’s owners to access money needed to be a success. Whether it is a small business or a corporation, success depends on having the ability to earn more than what is being paid out. Financial ratios help do just that. The main three ratios that are used in the business world are the current ratio, total debt ratio, and profit margin. Current ratio measures whether or not the business has enough resources to pay its bills over the next 12 months. This ratio can be determined by dividing the current assets by the current liabilities found on the company’s balance sheet. Total debt ratio is exactly what it says, a measure of the company’s debt. The total debt ratio is total debt divided by total assets. Profit margin is simply how much profit is made. Net income divided by sales shows profits. Each of these can be used for any size business (Ward, n.d.). If current ratio was to show an inability to cover the costs, debt financing may be a solution. As with all financial options, there are advantages and disadvantages. One advantage of debt financing is that it allows the founders of the company to maintain control...
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...Overview of Financial system of Bangladesh The financial system of Bangladesh is comprised of three broad fragmented sectors: 1. Formal Sector, 2. Semi-Formal Sector, 3. Informal Sector.The sectors have been categorized in accordance with their degree of regulation. The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs). The semi formal sector includes those institutions which are regulated otherwise but do not fall under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non Governmental Organizations (NGOs and discrete government programs. The informal sector includes private intermediaries which are completely unregulated. | | | Related links About financial markets | Regulators | Bank & FIs | Capital market | Insurance | Micro Finance Institutions (MFIs) | Recent developments | Key financial indicators | Print this page | | | | | Financial System of Bangladesh | Formal Sector | Semi Formal Sector | Informal Sector | Financial Market | Money Market ...
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...Foundations in Accountancy (FIA) Suite focuses on the core skills of financial accounting and m anagement accounting; and the wider role of the accountant in business at higher levels. It consists of a suite of awards, including certificates, diplomas and a revised Certified Accounting Technician (CAT) Qualification. It provides students with flexible entry points with certification awarded at each level, allowing students to tailor the awards, making them an attractive and relevant choice for employers. Diploma and Certified Accounting Technician (CAT) holders have direct entry to Skills level of the ACCA Professional Scheme. Foundations in Accountancy (FIA) Suite Students enrolling in FIA are provided with flexible entry points as follows: a. Preparatory Course for Association of Chartered Certified Accountants (ACCA) Introductory Certificate in Financial and Management Accounting Recording Financial Transactions (FA1) Management Information (MA1) b. Preparatory Course for Association of Chartered Certified Accountants (ACCA) Intermediate Certificate in Financial and Management Accounting Maintaining Financial Records (FA2) Maintaining Costs and Finance (MA2) c. Preparatory Course for Association of Chartered Certified Accountants (ACCA) Diploma in Accounting and Business Accountant in Business (FAB) Financial Accounting (FFA) Management Accounting (FMA) d. Preparatory Course for Association of Chartered Certified Accountants (ACCA) Foundations...
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...IASB issued a revised IAS 40. Since then, IAS 40 and its accompanying documents have been amended by the following IFRSs: • • • • • • • IFRS 2 Share-based Payment (issued February 2004) IFRS 4 Insurance Contracts (issued March 2004) IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (issued March 2004) IAS 1 Presentation of Financial Statements (as revised in September 2007)* Improvements to IFRSs (issued May 2008)* IFRS 9 Financial Instruments (issued November 2009)† IFRS 9 Financial Instruments (issued October 2010).† * † effective date 1 January 2009 effective date 1 January 2013 (earlier application permitted) © IFRS Foundation A1003 IAS 40 CONTENTS INTRODUCTION paragraphs IN1–IN18 INTERNATIONAL ACCOUNTING STANDARD 40 INVESTMENT PROPERTY OBJECTIVE SCOPE DEFINITIONS RECOGNITION MEASUREMENT AT RECOGNITION MEASUREMENT AFTER RECOGNITION Accounting policy Fair value model Inability to determine fair value reliably Cost model TRANSFERS DISPOSALS DISCLOSURE Fair value model and cost model Fair value model Cost model TRANSITIONAL PROVISIONS Fair value model Cost model EFFECTIVE DATE WITHDRAWAL OF IAS 40 (2000) 1 2–4 5–15 16–19 20–29 30–56 30–32C 33–55 53–55 56 57–65 66–73 74–79 74–79 76–78 79 80–84 80–82 83–84 85–85B 86 FOR THE ACCOMPANYING DOCUMENTS LISTED BELOW, SEE PART B OF THIS EDITION APPROVAL BY THE BOARD OF IAS...
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