This article throws light upon the four main sections of risk and return relationship. The sections are: 1. Risk and Return of a Single Asset 2. Risk and Return of a Portfolio 3. Capital Asset Pricing Model (CAPM) 4. Arbitrage Pricing Theory. Section # 1. Risk and Return of a Single Asset: Return on Investment: Return from a venture is [...]
This article throws light upon the top four asset pricing implications of CAPM. 1. The CAPM has asset pricing implications because it tells what required rate of return should be used to find the present value of an asset with any particular level of systematic risk (beta). In equilibrium, every asset's expected return and systematic risk coefficient should plot as [...]
Contents: Lecture Notes on Introduction to Financial Management Lecture Notes on the Definition of Financial Management Lecture Notes on the Evolution of Financial Management Lecture Notes on the Importance of Financial Management Lecture Notes on Factors Influencing Financial Decisions Lecture Notes # 1. Introduction to Financial Management: In our present day economy, finance is defined as the provision of money [...]