According to Peter Bernstein "When we take a risk, we are betting an outcome that will result from a decision we have made, though we do not know for certain what the outcome will be" Explain the quotation thoughtly
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According to Peter Bernstein "When we take a risk, we are betting an outcome that will result from a decision we have made, though we do not know for certain what the outcome will be" Explain the quotation thoughtly
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- According to Peter Bernstein "When we take a risk, we are betting an outcome that will result from a decision we have made, though we do not know for certain what the outcome will be" Explain exactly whyWhat type of risk should the rational (aka not stupid) investor be concerned with? Systematic risk (the stuff we can't squeeze out) which is measured by BETA Unsystematic risk (the stuff we can squeeze out) which we don't measure because we can squeeze it out Total risk which is what a nondiversified investor would faceIn a few sentences, answer the following question as completely as you can. We routinely assume that investors are “risk-averse return-seekers” (i.e., they like returns and dislike risk). If so, why do we contend that only systematic risk is important? Alternatively, why is total risk, on its own, not important to investors?
- Does a greater risk imply a bad investment? Give me some example.Do you believe on the principle-higher risk provides higher return? Can we achieve high return with no risk at all? Explain your answer.Which of the following statements correctly describe characteristics of a risk averse investor? Group of answer choices A. A risk-averse investor may be willing to give up some expected return in order to be exposed to a higher level of risk. B. Given a choice, a risk-averse investor will always choose the investment with the lower level of risk when deciding between two investments offering different levels of expected return. C. More than one of the other statements is correct. D. A risk-averse investor will demand compensation in the form of higher expected returns in order to take on investments with higher risk.
- If the CAPM were to hold, how would you identify the more risk averse investors?Both investors and gamblers take on risk. The difference between an investor and a gambler is that an investor Group of answer choices is normally risk neutral requires a risk premium to take on risk knows he or she will not lose money knows the outcomes at the beginning of the holding periodAn analyst wanting to assess the downside risk of an alternative investment and is considering the Sortino ratio, value at risk (VaR) and standard deviation of returns. Which of these would be appropriate and why? Explain why one or more of the options above are correct and explain why, if any of the remaining options are incorrect.
- Why are investors risk-averse? How can investors deal with different degrees of risk?If an investor prefers investment with higher risk , regardless to the return then he is following a ________ strategy. a. risk-aware b. risk-neutral c. risk-averse d. risk-seekingWhy is it helpful to analyze risk in comparison to all of the other potential rewards? Why is it also helpful to analyze risk in comparison to all other possible choices including the "risk of doing nothing"?