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2023 by The McGrawHill Companies, Inc. All rights reserved. 233 Averaging Methods Component Return A=10% B= (5%) C = 20% Arithmetic Average [.10 + () + .2] / 3 = % Geometric Average [() (.95) ()]1/3 1 = % McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 229 Examples of Indexes Domestic ?Dow Jones Industrial Average (30 Stocks) ?Standard Poor’s 500 Composite ?NASDAQ Composite ?NYSE Composite ?Wilshire 5000 McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 225 Bond Equivalent Yield: Sample TBill %.90365800,9800,9000,10:365000,10???????????rrrBE YBE YBE YBillTSamplenPPMcGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 221 Money Market Instruments ? Treasury bills ? Certificates of deposit ? Commercial Paper ? Bankers Acceptances ? Eurodollars ? Repurchase Agreements (RPs) and Reverse RPs ? Federal Funds McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 217 Derivatives Securities Options ? Basic Positions Call (Buy) Put (Sell) ? Terms Exercise Price Expiration Date Assets Futures ? Basic Positions Long (Buy) Short (Sell) ? Terms Delivery Date Assets McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 213 Examples of Indexes Int’l ?Nikkei 225 Nikkei 300 ?FTSE (Financial Times of London) ?Dax ?Region and Country Indexes EAFE Far East United Kingdom McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 29 Capital Market Fixed Ine Instruments ?Publicly Issued Instruments US Treasury Bonds and Notes Agency Issues (Fed Gov) Municipal Bonds ?Privately Issued Instruments Corporate Bonds Mortgag