COMM 308 Chapter Notes - Chapter 12: United States Treasury Security, Dividend Yield, Squared Deviations From The Mean

• School: Concordia University
• Department: Commerce
• Course: COMM 308
• Professor: Kaveh Moradi

Document Summary

Simply put, the required return depends on the risk of the investment the greater the risk is, the greater is the required return. One of the responsibilities of the financial manager is to assess the value of proposed real asset investment in doing this, it"s important to know what financial investments have to offer. From history, we"ve learned 2 main lessons: there"s reward for bearing risk, the greater the risk, the greater the potential reward. When you buy any type of asset, your gain (or loss) from that investment is called the return on your investment. Over the year, a company might pay cash dividends to its shareholders as a shareholder, you"re part owner of the company. If the company is profitable, it might distribute some of that profit to shareholders. So, as the owner of some stock, you might receive some cash. This is the cash component of owning stock.