Episode Details

When you invest in the equity of a private or publicly traded company, you get a claim on the residual cash flows of the company.  The risks you face can be categorized on three dimensions: price risk versus cash flow risk, total risk versus just downside risk and stand alone risk versus risk added to a portfolio. In this session, we look at the menu of choices that you have as an investor in how best to measure this risk, ranging from theory based models, where the risk is measured as a beta or betas to alternative models, where risk is captured in accounting ratios, proxies, market implied measures and margin of safety.
Playlist for class (Intro + 42 sessions): https://youtube.com/playlist?list=PLUkh9m2BorqnZGADa8cTzeJblmrZY_SqP&si=zI2pk17pJeld4nWR
Slides: https://www.stern.nyu.edu/~adamodar/pdfiles/invphilslides25/session4.pdf
Post-class test: https://www.stern.nyu.edu/~adamodar/pdfiles/invphilcertificate/postclass/session4Ntest.pdf
Post-class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/invphilcertificate/postclass/session4Nsoln.pdf

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