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Volatility - past, present and future
Volatility - past, present and future

... The moral of this tale is to start saving as early as possible, and to increase contributions whenever possible. No one can guarantee what an investor’s end portfolio balance will be, but the odds of reaching financial goals are better if you save more and save earlier. ...
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... This is a publication of HighMark Capital Management, Inc. (HighMark). This publication is for general information only and is not intended to provide specific advice to any individual or institution. Some information provided herein was obtained from third-party sources deemed to be reliable. HighM ...
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... In order to determine the relationship between ACE Limited and International Business Machines, we determined the correlation between the two stocks. We used this number to indicate the degree to which the two stocks move together in order to determine what kind of diversification exists in the port ...
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... Portfolio Construction, Management, & Protection, 5e, Robert A. Strong Copyright ©2009 by South-Western, a division of Thomson Business & Economics. All rights reserved. ...
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... Portfolio Construction, Management, & Protection, 5e, Robert A. Strong Copyright ©2009 by South-Western, a division of Thomson Business & Economics. All rights reserved. ...
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... disturbance that has mean 0 and is uncorrelated with f := (f1 , . . . , fk )T . The case k = 1 is called a single-factor (or single-index) model. Under Sharpe’s (1964) capital asset pricing model (CAPM) which assumes, besides known µ and Σ, that the market has a risk-free asset with return rf (inter ...
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... A) Idiosyncratic risk. B) Diversifiable risk. C) Systematic risk. D) Asset-specific risk. E) Total risk. 16- The principle of diversification tells us that: A) Concentrating an investment in two or three large stocks will eliminate all of your risk. B) Concentrating an investment in two or three lar ...
Sample Questions
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... A) Idiosyncratic risk. B) Diversifiable risk. C) Systematic risk. D) Asset-specific risk. E) Total risk. 16- The principle of diversification tells us that: A) Concentrating an investment in two or three large stocks will eliminate all of your risk. B) Concentrating an investment in two or three lar ...
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... standard deviation (which is the square root of the variance). The standard deviation shows how spread out is the distribution.  For stock returns, a more spread out distribution means there is a higher probability of returns being farther away from the mean (or expected return).  For our estimate ...
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... frontier contains various risky assets (due to the discrete nature of projects, the efficient frontier in the figure shown here is really a set of points, not a continuous line). The mean-variance efficient portfolios are combinations of these risky projects. Efficient Frontier ...
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... o Many utility functions can be expressed either exactly or approximately in terms of mean and variance o Furthermore, regardless of the investor's utility function, if returns are normally distributed, the mean and variance contain all relevant information about the distribution o The square root o ...
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Harry Markowitz

Harry Max Markowitz (born August 24, 1927) is an American economist, and a recipient of the 1989 John von Neumann Theory Prize and the 1990 Nobel Memorial Prize in Economic Sciences.Markowitz is a professor of finance at the Rady School of Management at the University of California, San Diego (UCSD). He is best known for his pioneering work in modern portfolio theory, studying the effects of asset risk, return, correlation and diversification on probable investment portfolio returns.
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