lio for five years and determine that its average return is 11.8%and the standard deviation of its returns in19.6%.Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the 95% prediction interval is ...%
lio for five years and determine that its average return is 11.8%and the standard deviation of its returns in19.6%.Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the 95% prediction interval is ...%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 13P
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Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
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You observe a portfolio for five years and determine that its average return is 11.8%and the standard deviation of its returns in19.6%.Would a 30% loss next year be outside the 95% confidence interval for this portfolio?
The low end of the 95% prediction interval is ...%
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