ACTSC371 Chapter Notes - Chapter 4: Mean Squared Error, Standard Deviation, Risk-Free Interest Rate
5 Oct 2018
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Reminder: copies of these notes are provided as a courtesy only. As mentioned in class, they are not a substitute for students attending lectures and preparing their own notes. Material covered in the lecture will often exceed the material in the typed notes. Students who miss a lecture are encouraged to get copies of handwritten notes from students who did attend the lecture. Different investments carry different levels of risk and different levels of return. A 30 day treasury bill issued by the government of canada is not as risky as a ten year bond issued by canadian tire say. If the two investments paid the same return to investors, no one would buy the canadian tire bond. Investors must be compensated for risk, or they won"t invest. We saw from the historical survey on investment returns, that generally, investors are compensated for risk.
