Page 20 - CAPE Financial Services Syllabus Macmillan_Neat

UNIT 1
MODULE 2: PORTFOLIO MANAGEMENT AND INVESTMENT (cont’d)
SPECIFIC OBJECTIVES
Students should be able to:
2. describe the regional and global
investment environment;
3. Compare the different types of
investors;
4. describe the factors which
determine required rates of
return;
5. describe the different measures of
risk in investments;
CXC A38/U2/16
CONTENT
Past and present investment environment
regionally and globally.
Specific historical achievements for
Caribbean countries with regards to offshore
banking:
(a) financial assets; and,
(b) financial investments.
(a) Heterogeneity of investors.
(b) Comparison of different investors:
(i) individual investors;
(ii) corporations (institutional),
investors with different
marginal tax rates;
(iii) informed; and,
(iv) uninformed investors.
Factors that determine the required rate of
return:
(a) risk free rate – nominal and real;
(b) expected rate of inflation; and,
(c) risk premium.
Measures of risk in investment:
(a) Capital Asset Pricing Model (CAPM);
(b) Present Discounted Value;
(c) Standard Deviation Value at Risk;
(d) Measured Market Risk;
(e) Alpha; and,
(f) Beta.
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