Analysis of Return and Risk

INTRODUCTION
 CONCEPT OF RETURN
• (I) REALISED RETURN
• (2) EXPECTED RETURN
 MEASUREMENT OF RETURN
• HOLDING PERIOD RETURN
• REALISED RETURN
EXPECTED RETURN (EX-ANTE RETURN)
REAL RATE OF RETURN
IMPACT OF TAXES ON INVESTMENT DECISION
RISK
UNCERTAINTY AND RISK
 TYPES OF RISK
• SYSTEMATIC RISK
• UNSYSTEMATIC RISK
 SOURCES OF RISK
i. BUSINESS RISK
ii. FINANCIAL RISK
iii. MARKET RISK
iv. PURCHASING POWER RISK
v. INTEREST RATE RISK
vi. EXCHANGE RATE RISK
vii. LIQUIDITY RISK
 TYPES OF INVESTORS
 RISK AVERSE
 RISK NEUTRALS
 RISK SEEKERS
RISKS IN DIFFERENT TYPES OF INVESTMENT

 CASH
 BONDS
 SHARES
 MEASUREMENT OF TOTAL RISK
RANGE
VARIATION OR STANDARD DEVIATION
COEFFICIENT OF VARIATION
MEASUREMENT OF SYSTEMATIC RISK
VALUATION OF UNSYSTEMATIC RISK
RISK RETURN TRADE OFF