Risk Return RelationshipMean Variance Utility[pic 1], portfolio with higher utility has a more attractive risk return profile. A>0 measures risk aversion, If A=0 investor is risk-neutral, utility score of risky portfolio is a certainty equivalent rate of returnRisk Return Relationship Capital Allocation Line Minimum Variance Efficient Portfolio Minimum Variance Portfolio[pic 2] [pic 3][pic 4][pic 5][pic 6][pic 7]Risk Reduction in Equally Weighted Portfolio [pic 8]
[pic 9] [pic 10][pic 11][pic 12][pic 13][pic 14] Fama-French Three Factors Size and Value Anomalies Efficient Market Hypothesis[pic 15][pic 16][pic 17][pic 18] [pic 19] Momentum1993 Article – Jegadeesh and Titman, purchasing and holding for 6 months stocks based on prior 6 month returns results in excess returns of 12% per year on average (negative coefficient means loser while positive coefficient means winner)
1. [pic 20] M.F.P.
2. [pic 21][pic 22][pic 23][pic 24]
3. [pic 25][pic 26][pic 27]
4. [pic 28][pic 29][par 31][pse 38]
Here are the 3 reasons why some investors are likely to fail.
1.
2.
3.
This article should be very relevant because not all investors will be successful in the short run, but the 5 reasons for doing so are:
1.
First, by looking at 2 reasons why some investors might fail, it allows you to easily understand the main sources of loss for companies. So if you need to read about the 2 main factors in your market failure, this article will be a good place to start.
2.
First, this article is based on a previous study by Jigendra Sarkar on the importance of 3 factors for failure for companies.
The data was reviewed and showed that the 2 main factors that led for poor return are:
financial,
financial instruments
financial institutions (for example a bank or a mutual fund);
financial services firm (for example insurance, business loans etc.);
investment firm (for example equity, debt securities, etc.)
investee (for example bank or insurance fund);
Secondly, in this investigation, there is a huge difference in investment patterns from the first 3 factors, for each of them the 2 main factors were taken into account.
Now, here is one of the most important points mentioned in this article. The key factor in many of the failure of companies has been not the money, but financial aspects such as financial products, financial services (for example stock exchanges) etc.
This means that many companies are either overvalued, undervalued, or underpriced based on their investment opportunities. If the companies are overpriced they will likely be overrepresented (e.g. over 1,000,000 shares vs 1,000 shares of a new company, etc.), which will increase returns. The same thing applies for investment products and services.
As mentioned above, the 3 main factors also led for bad returns (for example in investment products, as well as stock exchanges) are investment opportunities, financial risks, employee morale, income and profits, earnings on capital investments, and in some cases even their value in actual money they don’t need.
But if investors can avoid the bad things, then the future value of a company is worth it. Furthermore, companies should be able to save much more