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

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

Lecture D34 Coupled Oscillators Spring-Mass System(Undamped/Unforced)

Solution General solution x(t)= A cos wnt +B sin wnt or, x(t)=Csin(wnt+φ) Initial conditions

In lecture D28, we derived three basic relationships embodying Kepler's laws: Equation for the orbit trajectory

Outline Review of Equations of Motion Rotational Motion Equations of Motion in Rotating coordinates Euler Equations Example: Stability of Torque Free Motion Gyroscopic Motion Euler Angles Steady Precession Steady Precession with M=0 MIT

Chapter 4 Contents Compounding Perpetual Annuities Frequency of Compounding Loan Amortization Present Value and Exchange Rates and Time Discounting Value of Money Alternative Discounted Inflation and Discounted Cash Flow Decision Rules Cash Flow Analysis Multiple Cash Flows Taxes and Investment Annuities

Chapter 15 Contents How Options Work Investing with Options The Put-Call Parity Relationship Volatility Option Prices Two-State Option Pricing Dynamic Replication the Binomial Model The Black-Scholes model Implied Volatility

Capital Budgeting Any capital budgeting process consists of three elements: coming up with proposals for investment projects evaluating them -deciding which ones to accept and which to rejec