Describe How Making All or Part of a Product In-House

question 74

Essay

Describe how making all or part of a product in-house facilitates investments in highly specialized assets.

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Definitions:

Treynor Measures

Financial metrics used to assess the returns earned on a portfolio in excess of that which could have been earned on a risk-free investment, per each unit of market risk.

Sharpe Measure

A ratio developed by William F. Sharpe to measure risk-adjusted performance of an investment, calculating how much excess return you are receiving for the extra volatility that you endure for holding a riskier asset.

Dollar Weighted

A method of measuring investment returns which accounts for the size and timing of cash flows into and out of the portfolio.

Time Weighted

A method of calculating investment returns that eliminates the effects of cash inflows and outflows on the performance.