Explain the Trade-Off between Risk and Reward?

Q: Define then discuss Value-at-Risk.

A: The stock market is full of new policies and procedures. It get impacted by change in the government…

Q: Explain the difference between unique risk and systematic risk

A: Answer

Q: Explain the types of risk?

A: Introduction: There is a risk involved in any company decision, and in personal life decisions. In…

Q: Define stand-alone risk

A: Stand-alone risk:This refers to the risk linked with a single aspect of a firm or any particular…

Q: What are risk assessments?

A: Risk assessment means identification of risk faced by a business organization that hampers it from…

Q: Define Risk aversion

A: A risk averse saver is an investor who favors inferior returns with recognized risks somewhat than…

Q: What are value drivers?

A: Answer: The basic determinants of the cash flows of a project or primary factors in project…

Q: Explain what is risk decompositon

A: Risk is referred as the future uncertainty with reference to the deviation from an expected earnings…

Q: Describe the method of Payback Screening?

A: Answer: The company has several investment opportunities. It is vital that you opt for the right…

Q: Define . Slope of SML and its relationship to risk aversion

A: Introduction: SML refers to security market line, it is a line indicating the relationship between…

Q: What are quantitative measurements versus non-quantitative measurements with respect to risk?

A: Risk is used to describe the probability or uncertainty related to a future event with a favorable…

Q: Define Risk in general

A: In finance, risk is defined as the level of vulnerability that potentially creates financial loss…

Q: analysis needed

A: Risk Analysis is a process that helps you identify and manage potential problems that could…

Q: What types of information must be considered when it comes to risk and return?

A: Risk and return go hand in hand both are related to each other.There is direct correlation between…

Q: Explain risk-neutral valuation

A: A risk-neutral valuation is a probability measure used to help pricing derivatives and other…

Q: Why is the additional risk not taken without expected additional return?

A: The risk-return tradeoff takes note of that the potential return increments with an expansion in…

Q: Explain the difference between a linear risk and a nonlinear risk.

A: Linear risk is an enterprise's risk, based on the traditional economic system of "take-up-dispose."…

Q: suitable behavioral model?

A: Behavioral Model: Behavioral Model from its name only suggests the study of behavior. The study of…

Q: What is risk and give examples

A: While making investment decisions risk and return should be taken into consideration.

Q: Define control risk and detection risk. What is the difference between control risk and detection…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: what is return. Define risk and explain how it is assessed

A: Definition

Q: Explain political risk

A: Political risks are important to be considered because they have an impact on the profitability…

Q: Is funding a type of risk?

A: Funding means providing the funds to the party and charging interest rates from them. Firms need…

Q: / Risk and Return

A: There are 3 things given in the question and asked for an explanation of only 1. Risk and Return…

Q: Explain the specific relationship between risk and reward and why this relationship must be true.

A: Risk refers to probability for loss of investment value by an investor whereas Reward refers to…

Q: What do "threat," "vulnerability," and "risk" really mean?

A: Threat : A declaration of purpose to cause someone pain, harm, damage, or other hostile action as…

Q: What key assumption underlies the pure expectations theory?

A: Pure expectations theory in finance refers to the fact that the forward rates are nothing but the…

Q: Describe relationship between risk and profitability.

A: Risk and profitability have direct relation. Lower the risk, lower is the return and Higher the…

Q: Explain Expectations Theory?

A: Expectations theory attempts to predict what short-term interest rates will be in the future based…

Q: What is objective risk

A: Risk means the possibility of happening loss. Risk is directly related to the loss. If the amount of…

Q: What is the difference between positive and negative predictive value?

A: Positive predictive value is the probability that subjects with a positive screening test truly have…

Q: Discuss the Beta of  as measure of systematic risk.

A: In finance systematic risk refers to that risk which is inherent to the entire market. As the risk…

Q: Define risk

A: Risk can be defined as whenever there are chances that the investments’ actual outcomes are…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: What are the two stages in risk assessment?

A: Risk assessment is the process which involves analysis & identification of events that can have…

Q: Explain risk aversion

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: How is VaR used to limit risk?

A: Value at Risk (VaR) a statistical tool which measures and quantifies financial risk a firm or…

Q: What risk does Beta measure?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk 1. Systematic risk : It is…

Q: Why is it important to be able to quantify risk?

A: Risk is the chance that an outcome of an investment's actual gain will differ from an expected…

Q: What is the relationship between risk and return?

A: Risk return relationship: The association among risk and return is recognized as the risk-return…

Q: Provide one example of a calculation of risk and discuss its significance.

A: Risk is a chance that the actual gain or outcome from the investment will differ from the expected…

Q: For any given distribution of outcomes and probabilities, describe how preferences over risk affect…

A: An outcome is a potential result of an experiment in probability theory. The likelihood of an event…