财务管理第十三节课件.pptVIP

11.* www: Click on the web surfer icon to go to the stock screener on Yahoo! Finance where you can do searches for various betas. Students are often interested to see the range of betas that are out there. Lecture Tip: Students sometimes wonder just how high a stock’s beta can get. In earlier years, one would say that, while the average beta for all stocks must be 1.0, the range of possible values for any given beta is from -? to +?. Today, the Internet provides another way of addressing the question. Go to the Yahoo! Finance stock screener by clicking the web surfer icon. This site allows you to search many financial markets by fundamental criteria. For example, as of September 8, 2012, a search for stocks with betas of at least 2.00 turns up 1,041 stocks. 11.* Security K has the higher total risk Security C has the higher systematic risk Security C should have the higher expected return 11.* Which security has the highest systematic risk? C Which security has the lowest systematic risk? KO Is the systematic risk of the portfolio more or less than the market? more 11.* Based on the example in the book: Point out that there is a linear relationship between beta and expected return. Ask if the students remember the form of the equation for a line. Y = mx + b E(R) = slope (Beta) + y-intercept The y-intercept is = the risk-free rate, so all we need is the slope Lecture Tip: The example in the book illustrates a greater than 100% investment in asset A. This means that the investor has borrowed money on margin (technically at the risk-free rate) and used that money to purchase additional shares of asset A. This can increase the potential returns, but it also increases the risk. 11.* Ask students if they remember how to compute the slope of a line: rise / run If the reward-to-risk ratio = 8, then investors will want to buy the asset. This will drive the price up and the expected return down (remember time value of money and valuation). When will the flurry o