Risk and Return

 

 

In class discussion:

This section reviews fundamental information about the risk - return relationship and methods of measuring risk.  It assumes the student has an understanding of basic statistics and hypothesis testing.  The concepts learned are required in order to understand and master the advanced material in later sections covering capital budgeting, investment analysis, and valuation procedures.

 

 

Text Readings and Assignments:

 

Fundamentals of Financial Management, by Eugene F. Brigham & Joel F. Houston, 11th. edition, (Thomsom - South-Western)

ISBN: 0324319800

Student Textbook Website

 

Assigned Readings:                Chapter 8 (pp. 244-280)

 

Component Chapter Sections:

Pages

Questions

Self Test

Problems

Topics 8.1 - 8.5 245 - 279      
Assignments     1,2,5,8 1,2,3 1,2,3,4,5,6,7,8,9,11,13,14,16,19

 

Solutions to assigned Questions and Problems are available in MS WORD format here.

 

 

Dr. Constand's Online Readings:

The links below will take you to summaries of the professors' notes and discussions on the topics. 

 

Overview of Risk and Return

Types of Risk

Calculating Statistics for a Discreet Probability Distribution

Different Standard Deviation Calculations

Diversification

CAPM and APM

 

Quiz - Part 1

Quiz - Part 1 Answers

 

Quiz - Part 2

Quiz - Part 2 Answers

 

 

Other Online Readings and Assignments:

None

 

Jump to another topic in this module:

Overview of Entire Module

Time Value of Money

Incremental After-Tax Cash Flow

Risk and Return in Finance

Interest Rates

Debt - Valuation and Rates of Return

Equity - Valuation and Rates of Return

Calculating the Weighted Average Cost of Capital

Capital Budgeting - Valuation of Investment Projects