Ğstimate and interpret the ALPHA (α) and BETA (β) of a security, two statistics commonly reported on financial websites.
Use the Capital Asset Pricing Model (CAPM) and 3-Factor Model to evaluate the performance of an asset (like stocks) through regression analysis.Understand the real-world implications of the Separation Theorem of investments.ğorm a portfolio of securities and calculate the expected return and standard deviation of that portfolio.Ğxplain the tradeoffs between risk and return.Specifically, upon successful completion of this course, you will be able to: The over-arching goals of this course are to build an understanding of the fundamentals of investment finance and provide an ability to implement key asset-pricing models and firm-valuation techniques in real-world situations. This course is the first of two on Investments that I am offering online (“Investments II: Lessons and Applications for Investors” is the second course). The course emphasizes real-world examples and applications in Excel throughout. Finally, the course will conclude by connecting investment finance with corporate finance by examining firm valuation techniques such as the use of market multiples and discounted cash flow analysis. Building upon this framework, market efficiency and its implications for patterns in stock returns and the asset-management industry will be discussed.
Capm regression excel how to#
Specifically, we will learn how to interpret and estimate regressions that provide us with both a benchmark to use for a security given its risk (determined by its beta), as well as a risk-adjusted measure of the security’s performance (measured by its alpha). We will study and use risk-return models such as the Capital Asset Pricing Model (CAPM) and multi-factor models to evaluate the performance of various securities and portfolios. In this course, we will discuss fundamental principles of trading off risk and return, portfolio optimization, and security pricing.
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