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Topic 49: Asset Allocation and Portfolio Diversi cation - 163 moderate-risk investments In the spending phase, individuals are accepting of low-risk investments In this phase, the overall portfolio is less risky than during the consolidation years, but individuals still need to have some risky growth investments, such as common stock, for in ation protection The gifting phase risk level is comparable to the spending phase C Client risk tolerance measurement and application (1) It is vital to nd a portfolio that matches the investor s risk tolerance level while helping the investor achieve his or her return objectives (2) In certain cases, measuring risk tolerance can be objective, but it is generally a subjective measure of the emotional and nancial ability of an investor to withstand nancial loss A careful analysis of the client s risk tolerance should precede any discussion of return objectives (3) Asset allocation portfolios are generally marketed as follows: (a) Aggressive growth (b) Growth (c) Growth and income (d) Balanced (e) Fixed income (4) Both the return and risk level decrease as we move from aggressive growth to growth, growth to growth and income, and so on D Asset class de nition and correlation (1) Investments are distributed among three broad asset classes (a) Stocks (b) Bonds (c) Cash and money market instruments (2) The correlation coef cient is the driving force of asset allocation As mentioned earlier, as the correlation coef cient decreases from +1, there is an increase in diversi cation Diversi cation can increase the return of a portfolio while decreasing the risk (3) Keep in mind that the standard deviation of a portfolio is less than the weighted standard deviation of the individual stocks in the portfolio 2 Tactical asset allocation uses security selection as its main approach to building a portfolio, whereas asset allocation uses an investment policy that determines a suitable mix of assets for a client s portfolio 3 Passive versus active portfolio management (see Topic 48) A A passive strategy begins by setting speci c percentages for each asset class The portfolio will be rebalanced occasionally to maintain these percentages A passive strategy should not be confused with a buy-and-hold strategy B An active strategy is often referred to as market timing, whereas tactical asset allocation is driven by security selection as the reason for rebalancing 4 Strategies for dealing with concentrated positions A Rebalancing a portfolio to maintain asset allocation percentages is most appropriate for a tax-deferred retirement account, because gains on the sale of securities are not taxed It is also appropriate for a regular account, but frequent rebalancing may cause complicated tax reporting headaches.



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We see that CMU is connected to Yahoo through the backbone providers AT&T and Exodus Communications In recent years, there has also been focus on one approach to optimizing the area between client and server Content distribution has emerged from the Web-caching community as a way for providers to replicate their content through providers that act as reverse proxy caches Content distributors such as Akamai strategically replicate their hosted content so that client access is very fast and does not involve the originating server Content distribution is often a solution for bandwidth-heavy objects, such as images, which quickly clog up server-side bandwidth even though they don't require server-side application logic

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164 - Investment Planning B The basic rule of rebalancing is that it should be used at regular intervals, say every quarter or every six months





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The server-side application architecture is both the most complex and the most interesting While you can tune your application to some extent by understanding and playing to the features of the client and network pieces of the application, your efforts will have a much larger effect on the server side This is also where the greatest scalability and performance challenges lie Figure 2-7 shows the major pieces of this part of the architecture Moving from left to right, the request processor is usually the first component an incoming application request reaches Figure 2-7 Server-side organization

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and CEC stretching vibration in liquid nitriles and liquid alkynes, respectively (see Sec 61422) The basis of the experimental femtosecond CARS apparatus developed by Okamoto and Yoshihara (1990) which is reproduced in Fig 36-10 is essentially the same as that of Leonhardt et al (1987) and Zinth et al (1988) with the addition of the possibility to change the polarization of the laser radiation The main parts of the system are two dye lasers with short pulses and high repetition rates, pumped by a cw modelocked Nd:YAG laser (1064 nm, repetition rate 8 l MHz) The beam of the first dye-laser which produces light pulses with 75-100 fsec duration is divided into two parts of equal intensities and used as the pump and the probe beam.

One example of a request processor is a Web server The Web server has two roles: to resolve requests it can handle and reroute those it cannot For static Web pages, the Web server can resolve requests locally by accessing the filesystem to get the desired page As a request router, the Web server determines the kind of request and dispatches it to the proper handler, which in this book, typically means a Java servlet engine or servlet container The servlet container invokes the proper servlet instance, that is, a method on a Java class The servlet takes care of unpacking request arguments and will likely play a role in constructing the HTML reply In the middle, it may do many things, such as contact an application server or the database for query processing The job of the request processor is to identify the nature of the request and route it to an instance of functionality that can execute the desired business logic This mechanism is generally referred to as an application server For example, an application server is typically used to locate an instance of an application logic This logic could be in the form of a Java class implemented as an Enterprise JavaBeans (EJB) or a CORBA object These technologies, EJB and CORBA, are

TOPIC 50: EFFICIENT MARKET THEORY (EMH)

After fixed (for the pump beam) and variable (for the probe beam) optical delay lines, the radiation is focused onto the sample together with the Stokes radiation produced by the second laser (DL2), which is a standard synchronously pumped dye laser The anti-stokes signal generated in the sample is separated from the three input laser beams by an aperture, an interference filter, and a monochromator, and detected by a photomultiplier For further details we refer to Okamoto and Yoshihara (1990) Although time-resolved CARS is a powerful spectroscopic tool to study the vibrational relaxation of molecular systems, the information on dephasing dynamics via scattering from the isotropic part of the Raman tensor is often obscured by additional contributions due to the anisotropic component of the scattering tensor introducing also orientational relaxation effects and the nonresonant part of the third order nonlinear susceptibility (Fickenscher and Laubereau, 1990).

middleware technologies that make application logic robust, scalable, and interoperable by the application server (which manages them) In a well-designed system, this is all done behind the scenes The application logic is coded independently of the application server They are obviously two distinct things: One provides access and the other provides business functionality The trick is to give the application server the ability to automatically manage the deployment of business logic in a way that gives maximum flexibility to the server mechanism while remaining invisible to the underlying code Later in this book, we will see how EJB containers and EJBs themselves enable engineers to build real application servers To resolve an application request in terms of existing application data, the data must be accessed from its persistent storage, which is typically a database At a minimum, the database stores information about the state of the application, including users, orders, profiles anything that is part of the application data However, in addition to data about the application state, the database can store a good deal of business logic It does so in the form of stored procedures, triggers, and database constraints The data in the database is organized according to a data model, a logical specification for how the data is to be stored Physically, data is associated with tables Table data (as well as other structures) is written to disk, just like data in the filesystem At this point, it is good to remind ourselves that there are other clients to the application server and the database These can be messaging or legacy systems that communicate using technologies such as electronic data interchange (EDI) These clients are typically other businesses, not individual users, and they often interact with server-side software in batch mode

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