Podcast
Questions and Answers
What did Harry Markowitz develop in his landmark paper?
What did Harry Markowitz develop in his landmark paper?
- An approach to minimize return while reducing risk
- An approach to maximize profit without considering risk
- An approach solely focused on risk management
- An approach to portfolio selection balancing risk and return (correct)
What character does the portfolio theory have as per the text?
What character does the portfolio theory have as per the text?
- Normative, prescribing what a rational investor should do (correct)
- Prescriptive, dictating specific investment strategies
- Descriptive, detailing what past investors have done
- Evaluative, determining the performance of irrational investors
What does the Capital Asset Pricing Model (CAPM) predict?
What does the Capital Asset Pricing Model (CAPM) predict?
- The relationship between market volatility and stock price
- The relationship between risk and profitability of a company
- The relationship between return and diversification
- The relationship between risk of an asset and its expected return (correct)
How is the CAPM useful according to the text?
How is the CAPM useful according to the text?
What was the outcome of Harry Markowitz's seminal work according to the text?
What was the outcome of Harry Markowitz's seminal work according to the text?
What is the focus of the Capital Asset Pricing Model (CAPM)?
What is the focus of the Capital Asset Pricing Model (CAPM)?
What are the four building blocks of standard finance according to the text?
What are the four building blocks of standard finance according to the text?
In which year did Merton Miller and Franco Modigliani characterize investors as rational?
In which year did Merton Miller and Franco Modigliani characterize investors as rational?
Who described the markets as efficient in 1965?
Who described the markets as efficient in 1965?
Who prescribed the rules of mean-variance portfolio theory first in its basic form in 1952?
Who prescribed the rules of mean-variance portfolio theory first in its basic form in 1952?
When was the expanded version of mean-variance portfolio theory described?
When was the expanded version of mean-variance portfolio theory described?
According to standard finance, what is the expected return postulated to be a function of?
According to standard finance, what is the expected return postulated to be a function of?
What is the key difference between the traditional growth theory and the new growth theory?
What is the key difference between the traditional growth theory and the new growth theory?
What did Adam Smith recognize in his work The Wealth of Nations?
What did Adam Smith recognize in his work The Wealth of Nations?
How do the models described in the text differ from traditional equilibrium models?
How do the models described in the text differ from traditional equilibrium models?
In the context of the text, what is the central essence of the 'agency problem'?
In the context of the text, what is the central essence of the 'agency problem'?
What is a common characteristic of the new market models described?
What is a common characteristic of the new market models described?
What tends to be high in companies that face the agency problem according to the text?
What tends to be high in companies that face the agency problem according to the text?
According to Michael Jensen and William Meckling, what can self-interested managers do in a company?
According to Michael Jensen and William Meckling, what can self-interested managers do in a company?
How do researchers in recent years apply the concept of endogenously generated change?
How do researchers in recent years apply the concept of endogenously generated change?
What was the traditional explanation for economic growth according to the text?
What was the traditional explanation for economic growth according to the text?
What is more likely to happen in companies with substantial free cash flows?
What is more likely to happen in companies with substantial free cash flows?
What did Michael Jensen and William Meckling analyze in their seminal paper 'Theory of the Firm: Managerial Behaviour, Agency Costs, and Ownership Structure'?
What did Michael Jensen and William Meckling analyze in their seminal paper 'Theory of the Firm: Managerial Behaviour, Agency Costs, and Ownership Structure'?
How are technological drivers of growth depicted in the new growth theory?
How are technological drivers of growth depicted in the new growth theory?
What did Fama learn from Shiller and Summers about irrational bubbles in stock prices?
What did Fama learn from Shiller and Summers about irrational bubbles in stock prices?
What was the significant finding presented by Andrei Shleifer in 1985 that challenged the efficient markets hypothesis?
What was the significant finding presented by Andrei Shleifer in 1985 that challenged the efficient markets hypothesis?
How did Shleifer's findings about new S&P 500 stocks relate to the concept of market efficiency?
How did Shleifer's findings about new S&P 500 stocks relate to the concept of market efficiency?
What statement did Myron Scholes make when critiquing Shleifer's paper?
What statement did Myron Scholes make when critiquing Shleifer's paper?
How did Andrei Shleifer's findings about new S&P 500 stocks differ from what should happen in an efficient market?
How did Andrei Shleifer's findings about new S&P 500 stocks differ from what should happen in an efficient market?
What impact did Fama's acknowledgment of irrational bubbles have on the efficient market theory?
What impact did Fama's acknowledgment of irrational bubbles have on the efficient market theory?
Flashcards are hidden until you start studying
