Definition and analysis of different notions of advanced corporate finance

Résumé du document

Investment management is the management of various securities as shares, bonds and asses in a professional way. The aim is to satisfy the investment aims and needs of the investors. Investors could be represented by insurance companies, pension funds, corporations that is to say by institutions or by private investors (alone or through mutual funds). The term asset management is often used to refer to the management of collective investments, whilst the more generic fund management may refer to all forms of institutional investment as well as investment management for private investors. Investment managers, who specialize in advisory or discretionary management on behalf of private investors, may often refer to their services as wealth management or portfolio management often within the context of "private banking".

Extraits

[...] (1952). Portfolio Selection, Journal of Finance 77-91. [...]

[...] The formula of CAPM is: Return = RF + beta X (RM-RF) Or, RF = beta X (RM-RF) - R : rate of return envisaged on a quoted value - RF : rate of free investment - RM : rate of return of the suitable class of credit - Beta : general risk of investment on a large market V Beta Beta is a measure of a stock's volatility in relation to the market. The beta which is the coefficient of the financial volatility and sensitivity indicates the relationship between fluctuations in the value and market fluctuations. It is obtained by regression of the profitability of this title on the profitability of the overall market. definition, the market has a beta of and individual stocks are ranked according to how much they deviate from the market. [...]

[...] Definition and analysis of different notions of advanced corporate finance Table of contents I The investment management II The Markowitz theory III Diversification IV CAPM V Beta VI Risk and return VII Active vs. Passive Investment VIII Fundamental & Technical analysis I The investment management The Investment management is about the management of various securities as shares, bonds and asses in a professional way. The aim is to satisfy the investment aims and needs of the investors. Investors could be represented by insurance companies, pension funds, corporations that is to say by institutions or by private investors (alone or through mutual funds). [...]

[...] Indeed, Risk aversion consists in the tendency to try to avoid risky situations, unless relevant compensation is offered. Let's focus on example to illustrate these statements: The risk adverse individual faced with two events each having the same expected outcome will choose the outcome with the lower level of risk. We must remember that, the expected benefits or returns to be received from an investment come in the form of the cash flows generated by investments made. VII Active vs. [...]

[...] It includes both the fact of making a loosing trade besides having a lower return than the one expected. To calculate or at least evaluate the risk of a stock, we usually calculate the standard deviation of the return of a security in the longest period of time possible. Risk is often associated in people mind with losses. Let's have a look to the various types of risk: - The capital risk consists in the loss of the capital invested. [...]