Essential for evaluating the performance of any investment

Jun 142011
 

This chapter discusses the concept of returns, essential
for evaluating the performance of any investment. We
will start by defining the arithmetic return in any given
period and then expand the definition to multiperiod
returns. Then we will define the logarithmic return in
any given period and again expand the definition to
multiperiod returns. We will conclude by discussing the
distinction between these two types of returns.
Witty Professor (WP): Today well begin our short course
on essential financial tools. Hopefully by the time
were done youll have mastered many concepts that
you may have found obscure and intimidating before.
Insightful Student (IS): Do you mean that by the end
of the course well be able to tell one Greek letter from
another?!
WP: Hopefully youll learn that and a lot more. Yes, well
talk about alphas, betas, rhos, and sigmas, but surely more important than the Greek letters are the concepts
behind them.

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How To Select the Correct Price For a Product

Oct 152009
 

How firms set prices ??

Price BarThe Biggest question after making a product is what should be the price of the product??. It should be less than the competitor so that people will get attracted or It should be greater than the competitor so that people will think this is a better product. There are infinity question around how firms set product prices??

Below details are just a small incite to the pricing details…

Relative Price:

The difference between nominal price and relative or real price (as exchange ratio) is often made. Nominal price is the price quoted in money while relative or real price is the exchange ratio between real goods regardless of money. The distinction is made to make sense of inflation. When all prices are quoted in terms of money units, and the prices in money units change more or less proportionately, the ratio of exchange may not change much. In the extreme case, if all prices quoted in money change in the same proportion, the relative price remains the same

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