calculations. I also compared the result to the earlier analysis done based on average return, standard deviation and beta. Sharpe ratio, measures investment performance of the portfolio compared to risk taken. It’s most appropriate to use when evaluating diversified portfolios. Sharpe ratio penalizes non-diversified portfolios by also taking into account unsystematic risk. The high sharpe ratio represents the better performance for taking on additional risk. Wallflower Value Fund (WVF) shows the
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risk, is the company-specific or industry-specific risk in a portfolio, which is uncorrelated with aggregate market returns. Unsystematic risk can be mitigated through diversification, and systematic risk can not be.[1] Systematic risk should not be confused with systemic risk, the risk of loss from some catastrophic event that collapses the entire financial system. Contents [hide] * 1 Example * 2 Systematic risk and portfolio agement * 3 References * 4 See also | -------------------------------------------------
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All of the models to be discussed, i.e. Markowitz, Single Index, CAPM, and APT, have one single goal that is accomplished by using them. This goal is to make a portfolio, or individual securities, as efficient and well performing as possible by finding the optimal weights, highest return, and lowest risk. The Harry Markowitz model of 1952, or the mean-variance model, was one of the earliest models created to compare and contrast securities outcomes. This model uses the weights, standard deviation
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Priest J. Gordon FIN 6300 – Managerial Finance West Texas A&M University Spring 2013 Diversification 1. According to the article, what is a personal beta? (4 points) A personal beta is one’s professional sensitivity to the stock market. 2. List one job you think would create the highest personal betas (4 points) and one job that would create the lowest personal betas(4 points). Briefly explain your choices. (4 points) A commission stock broker or financial advisor would have an extremely high
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FIN 475 Spring 2014 Cases in Financial Management Case 2 Prepared For Dr. Haskins By Kaylynn Burgess, Cody Jochim, and Richard Caldecott February 20, 2014 1. The case gave a table that had the rate or return under certain conditions and from that we found the expected returns, standard deviations, and coefficients of variations for the assets. For the expected returns we took the probability and multiplied that by the rate of return for each type of economy, and then added them all up
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------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Efficient Portfolio Construction ------------------------------------------------- Prepared For: Pallabi Siddique Assistant Professor Department of Finance University of Dhaka ------------------------------------------------- Prepared By: Yasir bin yousuf
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Investment Portfolio Project University of Phoenix Introduction needs to go here | | |5 Yr Average | | | |Return | |T-bond |25% |0.02 | |Microsoft |20% |-0.33 | |Time Warner |10% |0.11 | |Disney |20% |0.02 | |Motorola |10% |-0
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avoided through diversification. Whereas this type of risk affects a broad range of securities, unsystematic risk affects a very specific group of securities or an individual security. Systematic risk can be mitigated only by being hedged. Even a portfolio of well-diversified assets cannot escape all risk. ________________________________________________________________________________ Definition of 'Unsystematic Risk' Company or industry specific risk that is inherent in each investment. The amount
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will most likely stay constant. d. a change in unsystematic risk has occurred; company price will most likely decline. e. no change in systematic risk; market prices in general will most likely stay constant. 5. No to both questions. The portfolio expected return is a weighted average of the asset returns, so it must be less than the largest asset return and greater
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Applied Microeconomics Coursework 1 Aim To derive and describe the effect of stock 2 and that of correlation between stock 1 and 2 prices on the overall portfolio risk. Introduction Standard deviation (SD) is used to measure risk by determining the volatility of a stock. It is a statistical term that measures the amount of variability around an average mean price. Correlation measures the relationship between two variables. Coefficient of Correlation can range between -1 and +1
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