24. Risk, Return, and Social Security

Financial Theory (ECON 251)

This lecture addresses some final points about the CAPM. How would one test the theory? Given the theory, what's the right way to think about evaluating fund managers' performance? Should the manager of a hedge fund and the manager of a university endowment be judged by the same performance criteria? More generally, how should we think about the return differential between stocks and bonds? Lastly, looking back to the lectures on Social Security earlier in the semester, how should the CAPM inform our thinking about the role of stocks and bonds in Social Security? Can the views of Democrats and Republicans be reconciled? What if Social Security were privatized, but workers were forced to hold their assets in a new kind of asset called PAAWS, which pay the holder more if the wage of young workers is higher?

00:00 - Chapter 1. Testing the Capital Asset Pricing Model
14:08 - Chapter 2. Evaluation of Fund Management Performance Using CAPM
22:30 - Chapter 3. Reassessing Assets within Social Security
53:04 - Chapter 4. Reconciling Democratic and Republican Views on Social Security
59:32 - Chapter 5. Geanakoplos's Personal Annuitized Average Wage Securities
01:08:48 - Chapter 6. The Black-Scholes Model

Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses

This course was recorded in Fall 2009.

Category:

Education

Tags:

• Securitization
• default
• CDO
• CDS
• mortgage
• pool
• delinquency
• subprime
• collateral
• leverage.