Question: Week 3 PowerPoint Presentation define the following terms, using graphs or equations to illustrate your answers where feasible. Risk in general; stand-alone risk; probability distribution

Week 3 PowerPoint Presentation

define the following terms, using graphs or equations to illustrate your answers where feasible.

Risk in general; stand-alone risk; probability distribution and its relation to risk

Expected rate of return, ^r

Continuous probability distribution

Standard deviation, ; variance, 2

Risk aversion; realized rate of return, r

Risk premium for Stock i, RPi; market risk premium, RPM

Capital Asset Pricing Model (CAPM)

Expected return on a portfolio, r^p; market portfolio

Correlation as a concept; correlation coefficient,

Market risk; diversifiable risk; relevant risk

Beta coefficient, b; average stocks beta

Security Market Line (SML); SML equation

Slope of SML and its relationship to risk aversion

Equilibrium; Efficient Markets Hypothesis (EMH); three forms of EMH

Fama-French three-factor model

Behavioral finance; herding; anchoring

Original answers please and thank you

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