Financial Management: Principles and Applications, 13/e

Chapter 7 An Introduction to Risk and Return

History of Financial Market Returns

Chapter Outline

1. 7.1 Realized and Expected Rates of Return and Risk (pgs. 194–202)

   1. Objective 1. Calculate realized and expected rates of return and risk.

2. 7.2 A Brief History of Financial Market Returns (pgs. 202–207)

   1. Objective 2. Describe the historical pattern of financial market returns.

3. 7.3 Geometric Versus Arithmetic Average Rates of Return (pgs. 207–211)

   1. Objective 3. Compute geometric (or compound) and arithmetic average rates of return.

4. 7.4 What Determines Stock Prices? (pgs. 211–214)

   1. Objective 4. Explain the efficient market hypothesis and why it is important to stock prices.

Principles and Applied

To develop an understanding of why ...