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Risk and Return Concepts

Horizontales
An asset pricing alternative to CAPM
Risk that can be diversified .
A well known financial asset pricing equation
The sum of returns divided by the number of returns.
Residual risk after diversifying.
States that security prices fully reflect all available information.
Typically considered the return on US Govt bonds and bills
An expression of an asset's volatility over time.
The square root of the average deviation of returns.
Verticales
Measures the amount of risk taken for each 1% return achieved.
Likelihood of occurrence
The dollar return expressed as a % of money invested.
Shows how required returns relate to risk.
Weighted Average of the possible returns.
Capital gain or loss + Income
Portion of required return that represents the reward for risk taken.
Measure of the sensitivity of a stock or portfolio.