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Financial Markets 4 (Risk (portfolio (fast and slow burner, stocks that…
Financial Markets 4
Risk
Equity risk premium
Return
Arithmetic return
Geometric return
Markowitz
Standard Deviation
Maximum loss / Roy
portfolio
fast and slow burner
stocks that move differently to each other
lower standard deviation than ind. stocks
Equity criteria:
Dividend yield
P/E
Book value to market value
calculation fair price
DDM more realistic version
Exam:
see slide for example
two or three stage versions of dividend growth models
go through past papers
CAPE ratio
share price / 10 year earnings
at the moment almost at all time high (only 2000 more)