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Principles of Finance 

Principles of Finance 

Principles of Finance :Prepare a PowerPoint Presentation to define the following terms, using graphs or equations to illustrate your answers where feasible.

  1. Risk in general; stand-alone risk; probability distribution and its relation to risk
  2. Expected rate of return, ^r
  3. Continuous probability distribution
  4. Standard deviation, σ; variance, σ2
  5. Risk aversion; realized rate of return, r
  6. Risk premium for Stock i, RPi; market risk premium, RPM
  7. Capital Asset Pricing Model (CAPM)
  8. Expected return on a portfolio, r^p; market portfolio
  9. Correlation as a concept; correlation coefficient, ρ
  10. Market risk; diversifiable risk; relevant risk
  11. Beta coefficient, b; average stock’s beta
  12. Security Market Line (SML); SML equation
  13. Slope of SML and its relationship to risk aversion
  14. Equilibrium; Efficient Markets Hypothesis (EMH); three forms of EMH
  15. Fama-French three-factor model
  16. Behavioral finance; herding; anchoring

Answer preview to principles of Finance 

Principles of Finance

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