what is alpha and beta in finanical investment?
87388
Let me translate what was said above. Alpha and Beta don't give the typical investor any meaningful projection for the future and can be dangerously abused . . .  and he's right!
1139979
Inventory Investment: There are three types of inventory investment: materials and supplies, work in progress, and finished goods.\n\nInventory Investment\nInventory investment relates to the composition of GDP. What is produced in a certain country is naturally also sold, but some of the goods produced in a given year may not be sold the same year, but in later years. Coherently, some of the goods sold in a given year might have been produced in an earlier year. The difference between goods produced (production) and goods sold (sales) in a given year is called inventory investment.\n\nIf firms produce more than they sell and inventories are accumulated, inventory investment is positive.\n\nIf firms sell more than they produce and inventories fall, inventory investment is negative.\n\n\nThree Important Relations\nThese three relations between production, sales and inventory investment can be helpful:\n\nInventory investment = production - sales\n\nProduction = sales + inventory investment\n\nSales = production - inventory investment
131849
"Beta is the slope of the best fit line obtained when excess return on the portfolio (or asset) over the risk-free rate is regressed against the excess of return of the market over the risk-free rate."\nIf the risk-free for a given period is 5% and an asset has a return of 12%, it has an excess of return of that asset over the risk-free rate is 12%-5% = 7%.\nSo a beta = 1 value would indicate that the stock "tends" to folow the market. A beta = 2 value would indicate that the stock "tends" to folow the market´s direction, but with movements twice as large. Negative betas indicate tendencies to move in the inverse direction of the market: when the market goes up the asset goes down and vice-versa. Beta does not measure the correlation though, meaning that this relation may be very tight or loose.\nBeta = 0 does not mean that the asset has low volatility, it simply means there is no linear relation between the asset and the market.
99070
Depends on many factors.\n\nInvestment\n\nDemand.\n\nReseach and development\n\nFDA fee.
1121681
None of these. Those are both assets.\n\nDividends, common stock, preferred, etc. are more typical of stockholder's equity.
769274
The answer is 11% because capital allocation is equal.  However, this is purely a classroom exercise that is not commonly used in the real world. \n\nI have seen attempts to put businesses into different WACC pools.  That's fine and good that different projects should return different projects.  If you're doing great if you're making 10% ROIC in the US, but you wouldn't be recouping the cost of capital if you only got 10% in Nigeria.  That's not the issue. The issue is more on the financing side. \n\nFor public companies, WACC is calculated using market weighted cost of capital for debt and equity.  Equity is calculated using the CAPM formula, which uses the "beta" for the stock.  The stock's beta will have already included the intrinsic risk of the operations in another country.  In the example that you provided, the WACC for country A may be 10% - but how can you get to that?  You'd have to fudge the beta downward to get the cost of equity.  And how do you know how much to fudge downward.  The country may be lower risk, but how much lower risk.  Also, how do you calculate the industry risk.  It's one thing to operate a utility, but what about a gold mine?  The bottom line is that you've now made multiple assumptions on your WACC and it's starting to be "made up".  \n\nThe second thing is that financing is not necessarily always in discreet pools.  Sure, you can raise debt to be associated with specific projects - that's easy.  But what about the equity.  You've raised a pool of equity - let's say $100m.  So if you keep it in a Country A account earmarked for the Country B, it's worth less value because the project has a higher WACC?  That's not right.   Or Project B pays a dividend to Project A and the same dollar suddenly becomes more valuable because of the transfer into a lower WACC holding company?  \n\nNope.  Generally you only have 1 WACC per company.
903768
http://www.mcdonalds.com/corp/invest/pub/2005_Financial_Report.html\n\nthis is the link to your question
666447
In investing, there is such a thing as the "Efficient Frontier" of portfolio mixes.\n\nThe resultant graph is a parabolic curve on its side. The base of the parabola is ont he Y axis. This is used every day in investment firms and Wall street-ites. Very real example.
129007
Look for stocks with a BETA of 2 - 3.  That means if the S & P 500 goes up 5 percent this next few months, a stock with a Beta of 2 should go up 10 percent and a Beta of 3 should go up 15 percent.  Be careful though, if the market goes down 5 percent your stock should go down by the same 10 and 15 percent repectivley.
766349
i've based my answer on a probability tree i've drawn.\n(i may not be right!)\n\nProbability both stocks go up\n= 17/25 x 10/17\n=2/5\n\nProbability neither stock goes up\n=8/25 X 6/8\n=6/25\n\ni'm not too sure about the following answers (haven't learnt conditional probability):\n\nIf Gateway goes up, what is the conditional probability Micron goes up?\n=(10/17) / (17/25)\n=250/289\n\nIf Micron goes up, what is the conditional probability Gateway goes up?\n=114/272 x 17/25\n=57/200\n\nIf Micron does not go up, what is the conditional probability Gateway will go up?\n=155/272 x 17/25\n=31/80\n\n\nAgain i may not be right!
657067
capital are the assets (money) used to fund the business.
325356
Here is what I suggest. Go to Yahoo mutual fund screen. And imput the parameters of the type of fund you wish to consider and see what pops up. \n\nHere is the link.\n\nThe second link is one of the screens I ran. It shows funds that are no load, with low initial investment that are ranked at least 4 star by Morningstar and are in the top 30% for one year performance.
295724
It depends. Please give the details of the INVESTment OPPORTUNITYies for my PERUSEal and EVALUATEion. You can e-mail me at: romy472000@yahoo.com. thanks.
1164627
I think this article will help you:\n\nhttp://www.exinfm.com/training/webpages/course03/Capital%20Budgeting%20and%20Cash%20Flow%20Analysis.mht
431020
Here is a very thorough and point-by-point comparison of these two products:\n\nhttp://financialsoft.about.com/od/reviewsfinancesoftware/a/MDel06vsQDel06.htm
938613
CAPM is basically a two factor model - considering only the risk free interest rate and beta. The risk free rate is the return investor will get for holding the security over a period of time, while beta will determine the return for taking the risk.\nFor more clarity refer to this link: http://www.investopedia.com/terms/c/capm.asp\nAPT on the other hand is not limited to the number of factors. You can build in as many factors in the model you want. See for example, Fama and French Three Factor Model.
456214
I'll give you what you need to know to make smart buys. The best way to go is a mutual fund. There are many companies who do this just find one and put money into it. Then you set what you want to invest in...what companies that is. The best way to go for sure profit is large corporations...don't worry about which ones...that's what the mutual fund is for...the accountant deals in what. He makes a small commission so you doing well is in his best interest. At the great depression...the average was still 3% gains. Today it's realistically 10%. Small corporations have a much higher percentage of increase in value because they start so low. Putting a quarter to a third of your mutual fund towards smaller companies wouldnt be a bad idea. If you have any other questions just email me...nbrikha@yahoo.com