1416 WordsOct 30, 20166 Pages

The relationship between risk and rate of return performance. The investors increase their required rates of return as the stocks increases. The security market line increases through the capital market. Some investors have all investments are risky preferences; some individuals will consider low-risk and high-risk investments. “Most of them only know how to invest long-term for growth because most of their financial advisors have only trained on how to develop assets or gather assets but haven’t trained on distribution during retirement” (Shaw, 2014). Expressing goals regarding returns can lead to inappropriate investment practices by the portfolio manager, such as the use of high-risk investment strategies or accounting in an attempt to buy low and sell high churning which involves moving quickly in and out of investments (Reilly & Brown, 2012). For example, an individual may have a return goal such as double my investment in the next five years. “The customer must become fully informed of investment risk associated with such a goal including the possibility of loss.
The Capital Asset Pricing Model (CAPM) the company, can measure each stock according to my market portfolio (Bringham & Ehrhardt, 2014). The CAPM calculated to be nearly 24% and the high market risk of 14. All investors focus on holding period, and they seek to maximize the expected utility of their terminal wealth by choosing among alternatives portfolio 's expected return and standard deviation. All

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## Difference Between The Following Performance Measures

829 Words | 4 PagesDifference between the following performance measures: The Sharpe ratio It is a ratio that describes how much excess return on investment the business is receiving for the extra volatility experienced by holding a riskier asset. It is the reward for holding a risky asset in a portfolio. The ratio is calculated by dividing the portfolio risk premium by the portfolio standard deviation. The ratio is given as follows: Sharpe ratio = (r P – r f )/ σ P Where: r- is the average rate of return of asset P

## The Value Of Investment Return

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## The Relationship Between Risk And Expected Returns

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### A Study on Systematic Risk

1109 Words | 4 Pages### Difference Between The Following Performance Measures

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832 Words | 4 Pages### Asset Pricing Theories : Comparing And Contrasting Capm, Atp And Fema French Theory

1715 Words | 7 Pages### Analysis of a Firm's Risk and Return: Campbell Soup Company

1239 Words | 5 Pages### Benefits And Drawbacks Of Rubber Plc

1525 Words | 7 Pages### Economic Performance And Its Impact On Financial Performance

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