taiwan财务管理_lecture9(ch9)

Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,The McGraw-Hill Companies, Inc.,2001,9-,18,Irwin/McGraw-Hill,Irwin/McGraw-Hill,Chapter 9,Fundamentals of Corporate Finance,Third Edition,Introduction to Risk, Return, and the Opportunity Cost of Capital,Brealey Myers Marcus,slides by Matthew Will,Irwin/McGraw-Hill,The McGraw-Hill Companies, Inc.,2001,Topics Covered,Rates of Return,73 Years of Capital Market History,Measuring Risk,Risk & Diversification,Thinking About Risk,Rates of Return,Rates of Return,Rates of Return,Rates of Return,Nominal vs. Real,Market Indexes,Dow Jones Industrial Average (The Dow),Value of a portfolio holding one share in each of 30 large industrial firms.,Standard & Poors Composite Index (The S&P 500),Value of a portfolio holding shares in 500 firms. Holdings are proportional to the number of shares in the issues.,The Value of an Investment of $1 in 1926,Source: Ibbotson Associates,Index,Year End,Rates of Return 1926-1998,Source: Ibbotson Associates,Year,Percentage Return,Expected Return,Measuring Risk,Variance,- Average value of squared deviations from mean. A measure of volatility.,Standard Deviation,- Average value of squared deviations from mean. A measure of volatility.,Measuring Risk,Coin Toss Game-calculating variance and standard deviation,Risk and Diversification,Diversification,- Strategy designed to reduce risk by spreading the portfolio across many investments.,Unique Risk,- Risk factors affecting only that firm. Also called “diversifiable risk.”,Market Risk,- Economy-wide sources of risk that affect the overall stock market. Also called “systematic risk.”,Risk and Diversification,Risk and Diversification,Stock Market Volatility 1926-1998,Std Dev,Risk and Diversification,Risk and Diversification,