Discussion Essays:
Describe the relationship between the number of assets in a portfolio and its variance, the components of risk of a security, the role of diversification, the "Capital Market Line" and the "Security Market Line".
Evaluate portfolios using the efficient frontier of Markowitz. Estimate company covariance with the S&P500 and use regression analysis to estimate company beta.
Describe the Modigliani & Miller (M&M) theory and the optimal capital structure.
Discuss how financial distress costs and agency costs affect M&M's theory.
Calculate company market value and cost of equity capital. Construct investment strategies and evaluate the risk of equity.