Management and Organizational Studies 2310A/B Chapter Notes - Chapter 13: Expected Return, Squared Deviations From The Mean, Standard Deviation

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2310A/B
• Professor: Shang Tang

Document Summary

Return, risk and the security market line- chapter 13. Expected returns and variances: expected return, based on the probabilities of possible outcomes. Portfolios: a collection of assets- such as stocks and bonds held by an investor, ex. Mutual fund- stocks, government bond, short term treasury bills, foreign stocks and foreign bonds: the reason for forming a portfolio is because we don"t invest our money all in 1 spot. Risk: systematic and unsystematic true risk- the unanticipated, portion resulting from surprises: risk factors affect a large number of assets. If it affected every asset in the portfolio: ex. Gdp risk, inflation risk: also known as non-diversifiable risk or market risk. Includes such things as change in gdp, inflation, interest rates, etc. Systematic risk: a risk that influences a large number of assets, also called market risk, unsystematic risk, risk factors that affect a limited number of assets, ex.