Discuss systematic and unsystematic risk

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1. A stock can be held in long or short position. What are the effects of each position and what are the best and worst case scenarios for being in these positions.

2. Describe behavioral finance.

3. Describe fundamental and technical analysis, compare and contrast.

4. Discuss the role that trading volume/open interest play in valuation of asset pricing? Can low trading volume influence a large block trade?

5. Discuss systematic and unsystematic risk, which can be diversified and why? Also discuss some measures of systematic risk and how they can be used to maximize returns and minimize risk.

6. Discuss the major assumptions behind SML and beta. How do these measures help in building a diversified portfolio of investments that maximizes return and minimizes risks?

7. Describe the risk return relationship and the different risk measures. Why are these important in constructing a diversified portfolio?

8. Explain the components of the dividend discount model (key drivers) and why it can be solved as perpetuity?

9. How would you describe investing in stocks and bonds to your granny?

10. Describe the key characteristics of stocks and bonds and contrast a couple of key characteristics that make them so different? How are each valued?

11. Describe preferred stock and its general characteristics. What are some of the key difference between common and preferred stocks?

12. Describe efficient markets and the three different forms of them. Do think the markets are efficient? If so to what degree and explain your reasoning.

13. What are mutual funds, describe the different types and why they differ? What is the difference between closed end mutual fund (EFT) and an open ended mutual fund? How do mutual funds benefit investors within the context of portfolio theory and diversification?

14. How might mutual funds address systematic and unsystematic risk? What type of mutual funds would you buy (load/no-load) and explain the differences.

15. How do the actions of the Federal Reserve and the economy in general effect the performance of common stock? (Be thorough!)

Reference no: EM13897271

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