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11 Cards in this Set
- Front
- Back
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Definition: Portfolio
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Group of assets such as stocks and bonds held by and investor
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porfolio weight
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Percentage of a portfolio's total value invested in a particular asset
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Correlation
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The tendency of the returns on two assets to move together
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Positive Correlation
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is the extent to which the returns on two assets move together
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Negative correlation
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the extent to which the returns on two assets move apart
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Uncorrelated
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there is no particular relationship between two assets
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the correlation coefficient definition
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measures correlatoin from -1 to +1
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Efficient Porfolio
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A portfolio that offers the highest return for its level of risk
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Beta Coefficient
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Measure of the relative systematic risk of an asset. Assets with batas larger (maller)than 1 have more (less) systematic risk than average
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systematic risk
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the reward for bearing risk depends only on the systematic risk of an investment
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CAPM-Capital asset pricing model
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a theory of risk and return for securities in a competitive capital market
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