Arbitrage Pricing Theory Arbitrage-arises if an investor can construct a zero investment portfolio with a sure profit Since no investment is required, an investor can create large positions to secure large levels of profit

Fourth Edition Advantages of the Single Index Model Reduces the number of inputs for diversification. Portfolio of 50 assets 50 expected returns;50 variances 1225 covariance. too difficult a task

INVESTMENTS Two-Security Portfolio: Return rp =W+W2r2 W Proportion of funds in Security 1 W2 Proportion of funds in Security 2 =Expected return on Security 1

Race and Anthropology Huge topic-only going to cover a small portion of the discussion Two notions about race: Race has a biological meaning, but not a social meaning *Race has a social meaning but not biological meaning

Capital allocation The choice of proportion in safe asset and proportion in risky asset; Most institutional investors follows top- down analysis---The first part is asset allocation and the next part is security selection decision

INVESTMENTS h Ealiti Risky Investments with Risk-Free Irrvestrent

Course overview The focus of this course is on financial theory and empirical evidence that are useful for investment decisions. The topics include: Financial theory: This include portfolio theory, CAPM, APT, discount factor model, they are important for decision-making in investments;

Types of market efficiency The weak-form of efficiency: price accurately reflect all information that can be derived by examining market trading data such as past prices, trading volume, short interest rate, etc

第二节股票 1、定义 股票是股份有限公司发行的用以证明投资 者的股东身份和权益,并据以获得股息和 红利的凭证

第六章投资组合理论 第一节风险与投资 第二节资产定价模型 第三节期货定价模型