RMI-2302 Study Guide - Midterm Guide: Data Mining, Competitive Advantage, Humanitarian Aid
27 Mar 2017
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Capm: capital asset pricing model, used to determine an appropriate required rate of return of an asset, used to make decisions about adding assets to a well-diversified portfolio, only reward systematic risk, not diversifiable risk. Bias: subjective view, alter decision making. Incentives: motivate individuals to perform an action, can be at the individual level, organizational level, or societal level, economics is basically a study of incentive systems, political incentives, short term vs. long term planning, discount rate. Type of incentives: financial- most incentives, moral- (cid:862)doing the right thing(cid:863, natural- (cid:862)curiosity, fear, anger, pursuit of happiness(cid:863, coercive- negative reinforcement, personal vs. social. Property: asset exposed to loss, real property, personal property, cause of loss, fire, theft, accident, loss, financial consequences, reduction in property value, lost income. Life- premature death: asset exposed to loss, your life, cause of loss, death because illness or accident, financial impact, single with dependents has highest risk.
