by Girl Banker
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You cannot go to a corporate finance or asset management interview without knowing the CAPM.
The CAPM model shows that the return to equity is a positive function of risk:
BBU (Blissful Books United) is the fictional book store created in my book To Become an Investment Banker.
o US Government bond yields are relatively easy to get a hold of online. Some portals will even allow you to download historical data into Excel.
o The downgrading of the US Government rating from AAA to AA+ by Standard & Poor's rating agency makes the usual text book assumption that the US Government is risk free debatable.
o If BBU is less volatile than the market, on average, β(BBU) will be less than 1.
o If BBU is more volatile than the market, on average, β(BBU) will be more than 1.
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What is WACC, the Weight Average Cost of Capital?
Where can you get the cost debt used to calculate WACC?
I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Initially published at girlbanker.com, all posts have now been subsumed into my personal website under katsonga.com/GirlBanker.
These blog posts make it as straight-forward for you as possible to get into a top tier investment bank.
I have 7 years of front office i-banking experience from Goldman Sachs and HSBC, in both classic IBD (corporate finance) and Derivatives (DCM / FICC).
I'm also a CFA survivor having passed all three levels on the first attempt within 18 months - the shortest time possible.