riskreturnandcostofcapital风险回报和资本成本.pptVIP

A typical stock on NYSE has standard deviation of annual returns of 49.24%. A portfolio has st.dev. Of under 20% (100 stocks) Unique risks cancel themselves out leaving only market risk. Large portfolios have little or no unsystematic risk. Systematic risk cannot be eliminated by diversification. Then the expected return on a two security portfolio consisting of the risky security and the risk free asset will be The reward for bearing risk depends only upon the systematic or undiversifiable risk of an investment since unsystematic risk can be diversified away. The expected return on an a