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Ch 12: Return, Risk, & the Security Market Line

About This Chapter

Learn about the evaluation of assets based on analyzing probable risks and returns. Our entertaining video lessons offer brief but comprehensive explorations of the topics presented.

Return, Risk, & the Security Market Line - Chapter Summary and Learning Objectives

Our experienced instructors show you ways in which investors look at assets to determine if they are desirable for portfolio inclusion by estimating risks and projecting likely returns. Use the written lesson transcripts in conjunction with the videos and lesson quizzes to enhance your comprehension and retention of key information. This chapter will introduce you to the following:

  • Portfolio weights
  • Return and variance
  • Expected and unexpected returns
  • Systematic and unsystematic risk
  • Systematic risk principle
  • Portfolio beta
  • The security market line

Video Objective
Portfolio Weight, Return & Variance: Definition & Examples Learn about portfolio weights, expected returns, and variance.
Expected & Unexpected Returns on Assets: Definition & Examples See the difference between expected and unexpected returns.
Systematic & Unsystematic Risk: Definition & Examples Study the components of return, systematic and unsystematic risk.
Using the Systematic Risk Principle & Portfolio Beta Explore the systematic risk principle, measuring risk, and portfolio betas.
The Security Market Line: Definition & Uses Discover how to relate beta to the security market line to aid in asset evaluation.

5 Lessons in Chapter 12: Return, Risk, & the Security Market Line
Test your knowledge with a 30-question chapter practice test
Portfolio Weight, Return & Variance: Definition & Examples

1. Portfolio Weight, Return & Variance: Definition & Examples

A portfolio can be designed in several different ways. It is important to understand the basics of a portfolio before building and managing one. In this lesson, we will go over the weight, return, and variance of a portfolio.

Expected & Unexpected Returns on Assets: Definition & Examples

2. Expected & Unexpected Returns on Assets: Definition & Examples

Investment means trying to guess what the return on an asset will be. But sometimes, that can be tricky. In this lesson, we'll examine the expected and unexpected returns, including their relationship to news and how they relate to efficient markets.

Systematic & Unsystematic Risk: Definition & Examples

3. Systematic & Unsystematic Risk: Definition & Examples

In financial markets, risk is an important concept to understand. If you hope to make money, you must risk money. In this lesson, we'll learn the difference between systematic and unsystematic risk, which will help you develop your investing strategy.

Using the Systematic Risk Principle & Portfolio Beta

4. Using the Systematic Risk Principle & Portfolio Beta

In this lesson, we'll discuss how investors must understand the systematic risk principle in their portfolio. We'll also explain how investors can measure and define the risk of their portfolios using betas.

The Security Market Line: Definition & Uses

5. The Security Market Line: Definition & Uses

How do you evaluate an asset's risk profile compared to the market as a whole? In this lesson, we'll examine what beta is and how the security market line (or SML) can help investors compare the risk of a specific asset to that of the market.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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