Forum Search: portfolio risk management

RE: How to calculate CAPM for emerging markets?
easy answer - take our emerging mkts class! seriously though, great question with easy answer - make sure that when you grab the beta from bloomberg that you use S&P 500 as your index as opposed to the default which may be FTSE 100. rationale - as you noted, you DO want to capture country spe... Read More
Go to post added 10 years ago
RE: Correct benchmark for beta
Yes, generally speaking, use the beta for the national market. But the key is match apples and apples - you must use the appropriate market risk premium to make the beta make sense! So for your Dutch company, use: 1) beta vs. Dutch national benchmark 2) the market risk premium of above benchma... Read More
Go to post added 10 years ago
RE: Finance 101: DDM?
1) IRR will give you the rate of return on a series of cash flows. NPV will give you the net present value of a series of cash flows. IRR by definition is the rate that sets NPV to be zero. So the IRR of a cash flow series can be positive and NPV can be negative if the discount rate (an input into N... Read More
Go to post added 10 years ago
stock trading
Here's a question that was posed to us: "in my financial markets class, we have a mock trading competition going on, and whomever wins at the end of the semester (70 or so days) will get a 10% increase in total points for the semester, which could potentially boost the grade up a letter. i, obviousl... Read More
Go to post added 10 years ago
Re: CFA certification
Hi guys, As earlier pointed out in the forum, CFA would be very relevant for career in equity research, portfolio management etc. Further it provides a basic understanding of all other fields of finance. It also depends on your present state of work, If you are working in a non-related filed and wa... Read More
Go to post added 10 years ago
Re: does the idiosyncratic risk of the company change?
Tricky question. Since firm specific risk is defined as total risk (sigma or standard deviation) less market risk, as the total risk of individual stock changes and assuming market risk stays constant (since we only update market risk premium once a year when Ibbotson publishes their updated Marke... Read More
Go to post added 10 years ago
Risk Free Rate (what to use)
Often times, we are asked to use a risk free rate for the CAPM. I have always been told to use the 10 year Treasury bond for the RFR, what is the proper rate to use and why?
Go to post added 9 years ago
Re: Break out depreciation from cost of goods sold or operating expenses
The challenge is that depreciation belongs in both COGS and SG&A, but the proper breakdown is not usually provided in public documents. If you have access to management accounts, then you'd be able do a deeper dive and get more granular.
Go to post added 2 years ago
Re: Multi currency model
The best practice is to always model out everything in functional currency. So if you have a USD portfolio and a EUR portfolio (different portfolios), model those out in their specific local currency (USD and EUR). Then translate each of them separately to the local (reported) currency and then c... Read More
Go to post added 3 years ago
Re: Multi currency model
If I have a Euro portfolio, USD porfolio and Local currency do I just make 3 balance sheet, Income statement and cash flow and then translate the foreign currency to presentation currency? and have my 4th consolidated statement?
Go to post added 3 years ago
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