Individual Stock and Market Portfolio. At this stage, we are going to discuss the relationship between the returns on an individual stock and the market portfolio. Individual Stock and Market Portfolio Characteristic Line The pairs of returns can be plotted in the figure. The line passing through the observations is the line of best fit. This line helps in describing the … [Read more...] about Individual Stock and Market Portfolio
Covariance
Two Methods of Measuring Risk – Absolute and Relative Measure of Risk
Two Methods of Measuring Risk ( Measures of Risk ). Risk arises from the expected volatility in the asset’s return over time caused by one or more of the following sources of returns on Investment. Fluctuations in expected income.Fluctuations in the expected future price of the asset.Fluctuations in the amount an investor can reinvest and fluctuations in returns … [Read more...] about Two Methods of Measuring Risk – Absolute and Relative Measure of Risk