According to this model company have to face two main types of risk.
Risk= Systematic + un-systematic
Systematic Risk:
Pocitical instability, war in the country, energy crises in the country etc.
Un-Systematics Risk:
shortage of employees, Clash between the management etc.
_
R = Rf + (Rm - Rf) x β (beta)
_
R = Return (expected)
Rf = Risk free Return
The minimum return which is desire by the investor
Rm = Market Return
The return which is provided by the market
β = systematic Risk
Note= when minimum then always keep the Rf value less and Rm value
Example:
we expect the return a security return Rm 4% but in market we get 10%
Rm - Rf = Market risk premium
10% - 4% = 6%
INVESTMENT AND PORTFOLIO MANAGEMENT
INVESTMENT VS SPECULATION AND GAMBLING
TYPES OF INVESTOR
INVESTMENT COMPANIES
TYPES OF MUTUAL FUNDS
TYPES OF BONDS FUNDS
MONEY MARKET FUNDS
SECURITIES MARKET
TYPES OF INDEX
TYPES OF BROKERS
BROKER'S ACCOUNT
MARGINAL ACCOUNT
ORDER AND ITS TYPES
RISK AND ITS TYPES
RETURN PORTFOLIO ANALYSIS
RISK PORTFOLIO ANALYSIS
RISK AND RETURN OF AN INDIVIDUAL SECURITIES
ANALYSIS OF COMMON STOCK VALUATION
CAPM MODEL (CAPITAL ASSET PRICING MODEL)
MARKOWITZ MODEL
MBA NOTES INVESTMENT AND PORTFOLIO MANAGEMENT
Risk= Systematic + un-systematic
Systematic Risk:
The risk face by the company due to its external environment is called systematic risk. This risk cannot be controled by the company.
Example:Pocitical instability, war in the country, energy crises in the country etc.
Un-Systematics Risk:
The risk face by the company due to its internal environment is called un-systematic risk.This risk can be conroled by the company.
Example:shortage of employees, Clash between the management etc.
CAP MODEL:
A model which shows the relationship between the systematic return and not shows un-systematic._
R = Rf + (Rm - Rf) x β (beta)
_
R = Return (expected)
Rf = Risk free Return
The minimum return which is desire by the investor
Rm = Market Return
The return which is provided by the market
β = systematic Risk
Note= when minimum then always keep the Rf value less and Rm value
Example:
we expect the return a security return Rm 4% but in market we get 10%
Rm - Rf = Market risk premium
10% - 4% = 6%
INVESTMENT AND PORTFOLIO MANAGEMENT
INVESTMENT VS SPECULATION AND GAMBLING
TYPES OF INVESTOR
INVESTMENT COMPANIES
TYPES OF MUTUAL FUNDS
TYPES OF BONDS FUNDS
MONEY MARKET FUNDS
SECURITIES MARKET
TYPES OF INDEX
TYPES OF BROKERS
BROKER'S ACCOUNT
MARGINAL ACCOUNT
ORDER AND ITS TYPES
RISK AND ITS TYPES
RETURN PORTFOLIO ANALYSIS
RISK PORTFOLIO ANALYSIS
RISK AND RETURN OF AN INDIVIDUAL SECURITIES
ANALYSIS OF COMMON STOCK VALUATION
CAPM MODEL (CAPITAL ASSET PRICING MODEL)
MARKOWITZ MODEL
MBA NOTES INVESTMENT AND PORTFOLIO MANAGEMENT
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