Boundless Lecture Slides Free to share, print, make copies and changes. Get yours at Available on the Boundless Teaching Platform

Using Boundless Presentations The Appendix The appendix is for you to use to add depth and breadth to your lectures. You can simply drag and drop slides from the appendix into the main presentation to make for a richer lecture experience. Free to edit, share, and copy Feel free to edit, share, and make as many copies of the Boundless presentations as you like. We encourage you to take these presentations and make them your own. Free to share, print, make copies and changes. Get yours at Boundless Teaching Platform Boundless empowers educators to engage their students with affordable, customizable textbooks and intuitive teaching tools. The free Boundless Teaching Platform gives educators the ability to customize textbooks in more than 20 subjects that align to hundreds of popular titles. Get started by using high quality Boundless books, or make switching to our platform easier by building from Boundless content pre-organized to match the assigned textbook. This platform gives educators the tools they need to assign readings and assessments, monitor student activity, and lead their classes with pre-made teaching resources. Get started now at: If you have any questions or problems please

Boundless is an innovative technology company making education more affordable and accessible for students everywhere. The company creates the world’s best open educational content in 20+ subjects that align to more than 1,000 popular college textbooks. Boundless integrates learning technology into all its premium books to help students study more efficiently at a fraction of the cost of traditional textbooks. The company also empowers educators to engage their students more effectively through customizable books and intuitive teaching tools as part of the Boundless Teaching Platform. More than 2 million learners access Boundless free and premium content each month across the company’s wide distribution platforms, including its website, iOS apps, Kindle books, and iBooks. To get started learning or teaching with Boundless, visit boundless.com.boundless.com Free to share, print, make copies and changes. Get yours at About Boundless

Calculating Expected Portfolio Returns Portfolio Risk Beta Coefficient for Portfolios Implications Across Portfolios Introduction to Risk and Return > Implications Across Portfolios Free to share, print, make copies and changes. Get yours at ect&utm_source=boundless

To calculate the expected return of a portfolio, you need to know the expected return and weight of each asset in a portfolio. The figure is found by multiplying each asset's weight with its expected return, and then adding up all those figures at the end. These estimates are based on the assumption that what we have seen in the past is what we can expect in the future, and ignores a structural view on the market. Calculating Expected Portfolio Returns Free to share, print, make copies and changes. Get yours at expected-portfolio-returns ?campaign_content=book_192_section_80&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess A Fruitful Portfolio View on Boundless.com Introduction to Risk and Return > Implications Across Portfolios

Portfolios that are efficient investments are those that effectively diversify the underlying risk away and price their investment efficiently. Portfolio risk takes into account the risk and weight of each individual position and also the co-variances across different positions. To calculate the risk of a portfolio, you need each asset's variance along with a matrix of cross-asset correlations. Portfolio Risk Free to share, print, make copies and changes. Get yours at ?campaign_content=book_192_section_80&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess Variance of any portfolio View on Boundless.com Introduction to Risk and Return > Implications Across Portfolios

In individual stocks, a beta coefficient compares how much a particular stock fluctuates in value on a day-to-day basis. A beta coefficient for a portfolio of assets measures how that portfolio value changes compared to a benchmark, like the S&P 500. A value of 1 suggests that it fluctuates as much as the index and in the same direction. A beta coefficient of less than 1 suggests a portfolio that fluctuates less than the benchmark. A negative beta is an indication that a portfolio moves in the opposite direction of its benchmark. Beta Coefficient for Portfolios Free to share, print, make copies and changes. Get yours at coefficient-for-portfolios ?campaign_content=book_192_section_80&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess Calculating Beta View on Boundless.com Introduction to Risk and Return > Implications Across Portfolios

Free to share, print, make copies and changes. Get yours at Appendix

Key terms Co-Variance In probability theory and statistics, co-variance is a measure of how much two random variables change together. Normalized variable In statistics, a normalized variable is one that is calculated using a ratio of itself and some benchmark figure. Normalized figures tend to be smaller than the original values. portfolio The group of investments and other assets held by an investor. risk The potential (conventionally negative) impact of an event, determined by combining the likelihood of the event occurring with the impact, should it occur. weighted average In statistics, a weighted average is an average that takes each object and calculates the product of its weight and its figure and sums all of these products to produce one average. It is implied that all the individual weights add to 1. Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return

Variance of any portfolio The formula shows that the overall variance in a portfolio is the sum of each individual variance along with the cross-asset correlations. Free to share, print, make copies and changes. Get yours at Wikipedia. "Modern portfolio theory." CC BY View on Boundless.comCC BYhttp://en.wikipedia.org/wiki/Modern_portfolio_theory#Risk_and_expected_returnView on Boundless.com Introduction to Risk and Return

A Fruitful Portfolio How would you calculate the expected return on this portfolio? Free to share, print, make copies and changes. Get yours at Amazon Web Services. "Boundless." CC BY View on Boundless.comCC BYhttp://s3.amazonaws.com/figures.boundless.com/508a73c2e4b045275e7845ee/expected+return.pngView on Boundless.com Introduction to Risk and Return

Calculating Beta Two hypothetical portfolios; what do you think each Beta value is? Free to share, print, make copies and changes. Get yours at Amazon Web Services. "Boundless." CC BY View on Boundless.comCC BYhttp://s3.amazonaws.com/figures.boundless.com/508c7229e4b0e81b6cfe4ea6/betacoefficientt.pngView on Boundless.com Introduction to Risk and Return

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return A portfolio is composed of 30% stock, 20% bonds, and 50% mutual funds. The stock is expected to have a 10% return, the bonds a 5% return and the mutual funds a 7% return. What is the expected return of the portfolio? A) 7.3% B) 7.5% C) 7% D) 8.1%

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return A portfolio is composed of 30% stock, 20% bonds, and 50% mutual funds. The stock is expected to have a 10% return, the bonds a 5% return and the mutual funds a 7% return. What is the expected return of the portfolio? A) 7.3% B) 7.5% C) 7% D) 8.1%

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return A portfolio is composed of 80% stock and 20% bonds. The variance of stock is 170 and the variance of bonds is 140. The covariance is 30. What is the portfolio's variance? A) 114 B) 101 C) 119 D) 168

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return A portfolio is composed of 80% stock and 20% bonds. The variance of stock is 170 and the variance of bonds is 140. The covariance is 30. What is the portfolio's variance? A) 114 B) 101 C) 119 D) 168

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return Over a period of three days, a company stock increased by 4%, decreased by _______%, then increased by 6%. During that same period, the Dow Jones increased by _______%, decreased by 1%, and then increased by 3%. What is the company's beta? A) 2 B) -2 C) 0.5 D) -0.5

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return Over a period of three days, a company stock increased by 4%, decreased by _______%, then increased by 6%. During that same period, the Dow Jones increased by _______%, decreased by 1%, and then increased by 3%. What is the company's beta? A) 2 B) -2 C) 0.5 D) -0.5

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return Under the capital asset pricing model (CAPM), what beta value is considered risky? A) A beta above 1 B) A beta equal to 0 C) A beta between 0 and 1 D) None of these

Free to share, print, make copies and changes. Get yours at Saylor OER. "Business Administration « Saylor.org – Free Online Courses Built by Professors." CC BY BY Introduction to Risk and Return Under the capital asset pricing model (CAPM), what beta value is considered risky? A) A beta above 1 B) A beta equal to 0 C) A beta between 0 and 1 D) None of these

Attribution Wikipedia. "Beta (finance)." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Beta_(finance) Wikipedia. "Normalized variable." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Normalized%20variable Wikipedia. "Modern portfolio theory." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Modern_portfolio_theory Wiktionary. "portfolio." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/portfolio Wiktionary. "risk." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/risk Wikipedia. "Co-Variance." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Co-Variance Wikipedia. "Modern portfolio theory." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Modern_portfolio_theory Wikipedia. "Expected return." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Expected_return Wiktionary. "weighted average." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/weighted+average Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return