Session 6: Post Class tests 1. The equity risk premium
... 1. The equity risk premium is the premium that investors charge over and above the risk free rate to invest in equities. A key source of information about equities is earnings reports from companies. ...
... 1. The equity risk premium is the premium that investors charge over and above the risk free rate to invest in equities. A key source of information about equities is earnings reports from companies. ...
Risk and return (1)
... • The average annual return on U.S. stocks from 1926 – 2001 was 11.6%. The average risk premium was 7.9%. • Stocks are quite risky. The standard deviation of monthly returns for the overall market is 4.5% (15.6% annually). • Individual stocks are much riskier. The average monthly standard deviation ...
... • The average annual return on U.S. stocks from 1926 – 2001 was 11.6%. The average risk premium was 7.9%. • Stocks are quite risky. The standard deviation of monthly returns for the overall market is 4.5% (15.6% annually). • Individual stocks are much riskier. The average monthly standard deviation ...
Read More - Financial Partners Capital Management
... attractive at 15x 2017 EPS because it has the potential to double revenues over the next five years (15% average annual growth), with the possibility of additional earnings growth from margin improvement. In addition, under a discounted free cash flow analysis that explicitly assumes new products wi ...
... attractive at 15x 2017 EPS because it has the potential to double revenues over the next five years (15% average annual growth), with the possibility of additional earnings growth from margin improvement. In addition, under a discounted free cash flow analysis that explicitly assumes new products wi ...
Portfolio Optimization with Markov
... The financial market considered in this paper is incomplete and consists of one bond and one risky asset. The incompleteness of the market is due to stochastic coefficients appearing in the price process of the risky asset and the bond. More precisely we assume that the interest rate of the bank acc ...
... The financial market considered in this paper is incomplete and consists of one bond and one risky asset. The incompleteness of the market is due to stochastic coefficients appearing in the price process of the risky asset and the bond. More precisely we assume that the interest rate of the bank acc ...
October 2014 - Markets May Head Higher, But
... weak sales growth and excessive share buybacks. IBM for example has had flat revenues for 6 years, but until recently its stock has soared. IBM has spent $140 billion on share buybacks and dividends since 2000! That buying has tripled its debt level. Maybe more focus on R&D or acquisitions would hav ...
... weak sales growth and excessive share buybacks. IBM for example has had flat revenues for 6 years, but until recently its stock has soared. IBM has spent $140 billion on share buybacks and dividends since 2000! That buying has tripled its debt level. Maybe more focus on R&D or acquisitions would hav ...
FAIR VALUE IN FINANCIAL STATEMENTS – ADVANTAGES AND
... ´reasonably informed´ about all aspects of the asset to be transferred, including its utility, form and features and the market environment and the assets value in the market environment at the time. A ´willing´ buyer is defined as someone who wants to buy but is not in any way compelled to do so. A ...
... ´reasonably informed´ about all aspects of the asset to be transferred, including its utility, form and features and the market environment and the assets value in the market environment at the time. A ´willing´ buyer is defined as someone who wants to buy but is not in any way compelled to do so. A ...
Slides - IIASA
... areas and accept the sacrifice, at present, of small area information. Look to simplifying the structure where possible, for example by smoothing. Massive simulations are now possible, but are still ...
... areas and accept the sacrifice, at present, of small area information. Look to simplifying the structure where possible, for example by smoothing. Massive simulations are now possible, but are still ...
date - Family Wealth Management
... than originally forecasted. It may be a year or more before the real estate sector is even stabilized and possibly even longer before it contributes to economic growth. This in turn will put a damper on housing, consumer spending, and the overall economy. So – who is responsible for the sub-prime mo ...
... than originally forecasted. It may be a year or more before the real estate sector is even stabilized and possibly even longer before it contributes to economic growth. This in turn will put a damper on housing, consumer spending, and the overall economy. So – who is responsible for the sub-prime mo ...
De Verantwoordelijke Organisatie
... Voice in an open culture • Give room for an extended notion of responsibility in the organisation • Demands a different organisational culture • Make room for voice (moral muteness) • At the top (corporate governance culture) and at the bottom. Even the smallest ...
... Voice in an open culture • Give room for an extended notion of responsibility in the organisation • Demands a different organisational culture • Make room for voice (moral muteness) • At the top (corporate governance culture) and at the bottom. Even the smallest ...
Country Risk Updates – Q4 2015 Oct
... payments and foreign debt and equity servicing. Low degree of uncertainty associated with expected returns. However, country-wide factors may result in higher volatility of returns at a future date. Enough uncertainty over expected returns to warrant close monitoring of country risk. Customers shoul ...
... payments and foreign debt and equity servicing. Low degree of uncertainty associated with expected returns. However, country-wide factors may result in higher volatility of returns at a future date. Enough uncertainty over expected returns to warrant close monitoring of country risk. Customers shoul ...
Lower Returns Likely in the Years Ahead
... are on sale.” Six years later, we think circumstances are much different. In fact, we expect returns from both bond and stock portfolios will likely be much more modest in the years just ahead. The outlook for bonds: It is easy to see why we expect modest returns from bonds over the next several yea ...
... are on sale.” Six years later, we think circumstances are much different. In fact, we expect returns from both bond and stock portfolios will likely be much more modest in the years just ahead. The outlook for bonds: It is easy to see why we expect modest returns from bonds over the next several yea ...
Chapter 19 ppt
... Use “RAND” function in Excel to generate random numbers between 0 and 1 from a uniform distribution U(0,1) To generate random numbers (approximately) from a standard normal distribution N(0,1), sum 12 uniform (0,1) random variables and subtract 6 To generate random numbers from any distribution D ...
... Use “RAND” function in Excel to generate random numbers between 0 and 1 from a uniform distribution U(0,1) To generate random numbers (approximately) from a standard normal distribution N(0,1), sum 12 uniform (0,1) random variables and subtract 6 To generate random numbers from any distribution D ...
The Determinants of the Market Interest Rate Given the quoted
... The nominal risk-free rate: rRF = r*+ IP rRF = Rate on Treasury securities. Then: rd = rRF + DRP + LP + MRP. Estimating IP: Utilizes Treasury Inflation-Protected Securities (TIPS). TIPS are indexed to inflation. How? The principal is periodically adjusted to the CPI. The IP for a particular l ...
... The nominal risk-free rate: rRF = r*+ IP rRF = Rate on Treasury securities. Then: rd = rRF + DRP + LP + MRP. Estimating IP: Utilizes Treasury Inflation-Protected Securities (TIPS). TIPS are indexed to inflation. How? The principal is periodically adjusted to the CPI. The IP for a particular l ...
understanding margins
... 2016. Broker, in turn, has to give this money to PSX on March 23, 2016. There is possibility that the investor may not be able to bring the required money by required date for buying shares. As an advance investor is required to pay a 5% of the purchased amount to the broker at the time of placing t ...
... 2016. Broker, in turn, has to give this money to PSX on March 23, 2016. There is possibility that the investor may not be able to bring the required money by required date for buying shares. As an advance investor is required to pay a 5% of the purchased amount to the broker at the time of placing t ...
Discussion of “Credit Supply and the Housing Boom” by Alejandro Justiniano,
... Over the period from 1993 through 2006, the implied expected growth rate was close to constant, meaning that all of the rise in housing stock prices relative to flow prices came from the falling interest rate But the collapse of prices starting in 2007 was not at all the result of rising interest ra ...
... Over the period from 1993 through 2006, the implied expected growth rate was close to constant, meaning that all of the rise in housing stock prices relative to flow prices came from the falling interest rate But the collapse of prices starting in 2007 was not at all the result of rising interest ra ...
References - Lorenzo Bini Smaghi
... may impair the effectiveness of monetary policy. This means not only that monetary policy might become less effective in achieving price stability, but also that it could have perverse effects on financial stability itself. I will consider two cases. The first case occurs when the market turmoil has ...
... may impair the effectiveness of monetary policy. This means not only that monetary policy might become less effective in achieving price stability, but also that it could have perverse effects on financial stability itself. I will consider two cases. The first case occurs when the market turmoil has ...
Turkey: More than Expected Hike by the CBRT
... In regard to investment in financial assets related to economic variables this document may cover, readers should be aware that under no circumstances should they base their investment decisions in the information contained in this document. Those persons or entities offering investment products to ...
... In regard to investment in financial assets related to economic variables this document may cover, readers should be aware that under no circumstances should they base their investment decisions in the information contained in this document. Those persons or entities offering investment products to ...
chap010
... • Helps in evaluating financial commitment a firm needs to make to: – Stockholders and bondholders – Attract investment • Cost of corporate financing (capital) is used in analyzing the feasibility of an investment on an ensuing project • The relationship between time value of money, required return, ...
... • Helps in evaluating financial commitment a firm needs to make to: – Stockholders and bondholders – Attract investment • Cost of corporate financing (capital) is used in analyzing the feasibility of an investment on an ensuing project • The relationship between time value of money, required return, ...
Document
... Profit maximization is not a well-defined financial objective, for at least two reasons: 1. Maximize profits? Which year’s profits? A corporation may be able to increase current profits by cutting back on outlays for maintenance or staff training, but that may add value. Shareholders will not welc ...
... Profit maximization is not a well-defined financial objective, for at least two reasons: 1. Maximize profits? Which year’s profits? A corporation may be able to increase current profits by cutting back on outlays for maintenance or staff training, but that may add value. Shareholders will not welc ...
POLICY CONFUSION, CROWDED TRADES, AND A RISE IN Highlights
... struggle, it raises the question of whether fiscal policy might be used to aid the recovery there, although there are significant political constraints that must be overcome with this. Overall, we think that markets have grossly underestimated the importance of an economy’s “balance sheet,” which is ...
... struggle, it raises the question of whether fiscal policy might be used to aid the recovery there, although there are significant political constraints that must be overcome with this. Overall, we think that markets have grossly underestimated the importance of an economy’s “balance sheet,” which is ...
Farm Credit System
... unwinding leverage Rapid unwinding of leverage associated with the structured finance (securitization) industry Government sector taking on new debt, risk of crowding-out of private sector Derivative exposure concentrations still unknown ...
... unwinding leverage Rapid unwinding of leverage associated with the structured finance (securitization) industry Government sector taking on new debt, risk of crowding-out of private sector Derivative exposure concentrations still unknown ...