Risk, Returns, and History

Objectives

• Calculate returns and identify measures of risk.
• Collect and analyze macroeconomic data and key financial ratios.

Reading

• Chapter 5: Risk, Return, and History

Measuring Returns

• Arithmetic and Geometric Returns by Michael McLaughlin @ Edspira
• Effective Annual Rate by Michael McLaughlin @ Edspira
• Annual Percentage Rate (APR) @ Khan Academy

Risk

• Defining and Measuring Risk by Aswath Damodaran @ NYU
• Value at Risk by Kenneth Abbott @ MIT in 2013
• Quantifying Risk Lecture by John Geanakoplos @ Yale in 2009
  • 00:00 - Expectation, Variance, and Covariance
  • 19:06 - Diversification and Risk Exposure
  • 33:54 - Conditional Expectation
  • 53:39 - Uncertainty in Interest Rates

Diversification and Portfolio Calculations

• Lecture by Andrew Lo @ MIT in 2008

Equity Premium and Risk

• Lecture by John Cochrane @ UChicago

Optional Advanced Topics

• Time Varying Risk Premium by John Cochrane @ UChicago