Investments Flashcards

1
Q

Sharpe

A

Std dev

Remember for Ss. Std deviation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Traynor

A

Beta

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Alpha

A

Absolute measure

Alpha cannot compare

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Risk

A

Qualitative and quanta five

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Total risk

A

Unsystematic and systematic

Measure by std

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Systematic Risk

A

Cannot be diversified away
Risk in the system
Beta

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Bond risks

A

Interest rate risk
Reinvestment risk
Purchasing power risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Business risk

A

Single company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Financial risk

A

Leverage. Too much bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Bond risk

A
Drip
Default
Reinvestment
Interest rate
Purchasing power risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Std

A

68
95
99
Positive skew ness is better. Hump to left

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Leptokurtic

A

Leap in returns

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Playkurtic

A

Plate. Lower peak

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Std calc

A

Sum
Gold 7
Gold 8

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Coefficient of determination

A

R2. Higher number closer correlation. Looking above .7

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Dividend discount model

A

Dividend/required return
What u think stock is worth
1.50dividend/.06. Required return

17
Q

Constant growth dividend model

A

Intrinsic value

Div/ required return - growth of dividend
D1. One period out
0 means dividend now

18
Q

Dividend growth rate

A

Growth of dividend = return on equity x retention ratio
Inverse of dividend payout ratio
Sum to one
Ret ratio is .60 payout is .40

19
Q

Required return

A

Single factor model dependent on beta
Risk free rate + (risk market-risk free rate) x beta

()beta stock risk premium

20
Q

Expected rate of return

A

Return = div plus 1/price+ growth rate.

21
Q

Bats

A

Beta rel. r2 70 higher
Alpha
Traynor.
Sharpe if beta not reliable

22
Q

Geometric retune

A

Takes into account compounding

23
Q

Holding period return

A

Sold-buy/buy