文档介绍：chapter 10 Introduction to risk, return, and the opportunity cost of capital
Chapter 10
Introduction to risk, return, and the opportunity cost of capital
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Objectives
Estimate the opportunity cost of capital for an “average-risk” project
Calculate the standard deviation of return for mon stocks or for a stock portfolio
Understand why diversification reduces risk
Distinguish between unique risk, which can be diversified away, and market risk which cannot
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Content
Rates of return: a review
A century of capital market history
Measuring risk
Risk and diversification
Thinking about risk
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When investors buy a stock or a bond, their es in
two forms: (1) A dividend or interest payment and (2) A capital
gain or a capital loss
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Percentage return: 收益率
Dividend yield: 股利收益率
Capital gain: 资本利得
Capital loss: 资本损失
Real rate of return: 实际收益率
Nominal rate of return: 名义收益率
Inflation rate: 通胀率
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Content
Rates of return: a review
A century of capital market history
Measuring risk
Risk and diversification
Thinking about risk
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When you invest in a stock, you don’t know what return you will earn3>. But by looking at the history of security returns, you can get some idea
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Market indexes
Financial analysts can’t trace every stock, so they rely on market indexes to summarize the return on different classes of securities
Market index: measure of the investment performance of the overall market
Dow Jones Industrial Average: index of the investment performance of a portfolio of 30 “blue-chip” stocks
Standard & Poor’posite index: index of the investment performance of a portfolio of 500 large stocks. Also called the S&P 500
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The historical record
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The safest investment, Treasury bills, had the lowest rates of return. Long-term government bonds gave slightly higher returns than Treasury bills
Maturity premium: