Microsoft PowerPoint - PoF.ppt

Overviewƒ 53

Assumptions

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Capital market line (CML)

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Security market line (SML)

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Critique

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Performance measurement

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Additional literature

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Haugen, R. A.,

Modern Investment Theory

, 5th edition, 2001.

Relevant chapters: 8 and 11.

Single-period random cash flows: CAPM