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Daily Archives: April 18, 2011

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Market Risk Metrics – Jensen’s Alpha

Jensen’s Alpha is the risk-adjusted performance metric that measures a portfolio manager’s returns against those of a benchmark. For asset allocation, the portfolio consists of the instrument (e.g. equity stock) being analyzed and the benchmark is a broad market index (e.g. S&P 500) – in

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Microsoft Catalyst Program: Entrepreneurial training for students and graduates

We started off the day with a review of the three challenges of starting and running a business. The first is the Stage one decision linked to opportunity cost and how that keeps on growing as we mature and succeed in life. The second challenge is launching the product or business challenge and the reason why we fail here is because we get products, pricing, selling or shipping wrong. The final challenge is the growth and expansion challenge where well established businesses comfortable and successful in one arena stumble and fail as they opt to grow and expand in newer markets

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Market Risk Metrics – Holding Period Return

The Holding Period Return represents the return earned by an instrument (e.g. an equity stock) over the time that it is held by an entity or alternatively over the period of analysis. A positive return indicates that the value of the instrument has grown in

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Market Risk Metrics – Introduction

Market risk is the risk that movements in market prices will adversely impact the value of an investment. There are four principal categories of market risk or risk factors: equity risk, interest rate risk, currency risk and commodity risk. Exposure to market risk for a

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Correlation – Relative Price Graphs

Another way of viewing correlations between variables is to graph the relative price of one item against that of another. This analysis is useful for: Identifying mispricing opportunities, i.e. assessing the relative cheapness of one item in terms of the other – which is useful

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