The Theory Of Symmetric Portfolio

Mankiw, N. G. R. E. G. O. R. Y. (2014). Principles of macroeconomics. Cengage Learning.

With Reference to this statement, describe, discuss and illustrate the principles of portfolio theory. Your essay should include coverage of the Markowitz Efficient Frontier and the Capital Market Line.

Yield to maturity (YTM) reflects the return required and set by the market on the assumption that the bond is held to maturity. In equilibrium, it is also the return that investors can expect to earn over the life of the bond. Holding Period Return (HPR) is the expected return over a future period, and is not based on the assumption that the bond is held to maturity. SIMILARITIES    Both expressed as annualised returns (not effective rates) Use the settlement price as cost base Total returns accounting for both the coupon interest component and the capital gain/loss component

In this paper I will be discussing the wealth gap. I will also be discussing if there should be a “special” tax to redistribute the wealth. I hope to enlighten the reader of the issue of the wealth gap, and if a tax would help.

The sociological views of functionalist and conflict theorist on stratification and economic inequality have had profound impact on the current economic discussion. In the past, economist have argued that wealth inequality is essential for “economic strength and social stability. [5] That wealth inequality “is needed to reward hard work, talent and innovation”. [6] However, in recent years, many economist have come to the conclusion that extreme wealth inequality, can lead to economic stagnation and social instability. What degree of

CAPM is a model that describes the relationship between risk and expected return, and the formula itself measures the expected return of the portfolio. Mathematically, when beta is higher, meaning the portfolio has more systematic risk (in comparison to the market portfolio), the formula yields a higher expected return for the portfolio (since it is multiplied by the risk premium and is added to the risk free interest rate). This makes sense because the portfolio needs to

As such, taking wealth from the rich and giving it to the poor would maximize the aggregated utility, and the state of optimized utility would be perfect economic equality. As Lerner puts it, "If it is desired to maximize the total satisfaction of a society, the rational procedure is to divide income on an equalitarian basis" (The Economist, 2015). In other words, if we are given a fixed amount of wealth and a group of people to distribute it to, we can maximize total happiness by dividing the wealth equally between the members of that

Thomas Piketty proposes implementing “a progressive global tax on capital” rather than a progressive income in responding to current inequality issues, he feels that the government must assume a central role in the “economic and social life” of its citizens through the redistribution of wealth. (471 - 474). As defined by Piketty, “modern redistribution does not consist in transferring income from the rich to the poor, at least not in so explicit a way. It consists rather in financing public services and replacement incomes that are more or less equal for everyone especially in the areas of health, education, and pensions”

In the article, “Capital in the Twenty-First Century” by Thomas Piketty, Piketty explains the history of unstable and stable periods of economic equality and inequality in the world. His theory “central contradiction of capitalism” explains the rate of wealth coming out of the economy is greater than the economy itself. As a result, wealth becomes more divided and the inequality grows between the distributions of the wealth. Piketty proposes a ‘global tax’ to equalize the current economic wealth, but the way he measured this wealth was flawed.

Portfolio and project management are similar and sometimes thought of as being one another. Between the project and portfolio management the goals and the intended strategic action is similar. The process between the portfolio management includes and involves the resources that list a process, which includes the evaluation, selection, and prioritization. Portfolio management and strategic management assist with the organizations missions and goals. These lay out the objective in the continuous planning and monitoring that assist with reaching the goals.

UNIVERSITY OF ILLINOIS AT CHICAGO Liautaud Graduate School of Business Department of Finance Professor Hsiu-lang Chen 1 Practice Problem I

According to the CAPM model:R_i=α+βR_m+ε, α represent the abnormal return gained by the portfolio. If the market is efficiency, the α has to be zero.

In “Human Capital, Asset Allocation, and Life Insurance” the author is trying to prove that even though asset allocation and life insurance decisions have been considered separately in the past, they need to be looked at together because of the affect human capital has on optimal asset allocation and life insurance demand. “We argue that these two decisions must be determined jointly because they serve as risk substitutes when viewed from the

So the investor will invest 32.58860806% of the investment budget in the risky asset and 67.41139194% in the risk-free asset.

axrate)y+assetpayoff(Y)-facevalue$, as dividends. We restrict attention to equilibria where $facevalue > assetpayoff(Y)$, so that there is a positive probability that banks default. Notice that all decisions are made before the realization of the idiosyncratic shock,