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Flashcards in Lecture 4 + Quotes Deck (4)
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1
Q

Definition and difference in1. “hedge asset” and 2.”safe havens”

A

is an asset that is uncorrelated (or negatively correlated) with another asset or portfolio….

  1. on average
  2. in times of market stress or turmoil
2
Q

beta is equal to?

A

the co variance between the security’s return & the market’s return
/ the variance of the market portfolio.

3
Q

beta is a measure of?

A

of how a security’s return covaries with the market returns, normalized by the market variance.

4
Q

CAPM alternative, 3 methods used by Fama & French?

A
  1. Size
  2. Book(net book value of assets) to(/) market(price per share)
  3. Beta