Define risk

Q: Define asset-backed security

A: Answer: Asset backed security is nothing but a security is made up of other financial securities.…

Q: Define beta risk

A: The portfolio beta is a measure of the portfolio’s volatility. It measures how the stock moves 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: Distinguish between inherent risk and control risk

A: Inherent risk: Inherent risk measures the auditor’s assessment of the susceptibility in a material…

Q: Define default risk

A: Default risk: It is the threat or risk of a bank taking on the plausibility that a borrower will not…

Q: what is control risk

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Q: Define Intrinsic value.

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Q: Explain pure expectations theory

A: It estimates the future interest without considering the maturity risk. According to the expectation…

Q: Explain what is risk decompositon

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

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: inherent risk

A: Inherent risk is the risk of errors or frauds that may occur irrespective of the operation of…

Q: Define the term predictive value.

A: Predictive value refers to the fact that quality financial information can be used to base…

Q: Define relevant risk

A: For investors, risks are classified into the following two types: Systematic risk/relevant…

Q: What is event risk?

A: Event risk is the likelihood of a sudden event adversely affecting an organization, industry, or…

Q: +ve risks and -ve risks

A: A risk is an unexpected event that may impact and affect any area of your project says, people,…

Q: Describe Detection Risk.

A: Risk: It is the uncertainty about the future events of the company. The adverse chances of choosing…

Q: Define warrant

A: A warrant is a security that entitles a holder to buy the stock at a fixed price on a future date.…

Q: Discuss and explain the sub-processes of risk management

A: Risk management refers to those processes and steps which a finance manager undertakes to reduce the…

Q: Describe Control Risk

A: Audit Risk: The risk of issuing an unqualified audit report due to failure in detecting material…

Q: Define fair value hedges.

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Q: Define Operational risk.

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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: Describe the value chain

A: “Since you have posted multiple questions, we will solve the first question for you. To get the…

Q: What are the CVP assumptions?

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Q: Explain Expectations Theory?

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

Q: audit risk.

A: First option is wrong because the inherent risk is the risk of material misstatements that may exist…

Q: Distinguish between: Systematic risk and Unsystematic risk

A: The risks faced by the company arises from both micro as well as macro levels. The risk arising out…

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: List and define the different major categories of risk events

A: Risk can be defined as the variability of returns. When the variability of the return is high, in…

Q: Provide a comprehensive definition of risk

A: Risk is described in financial terms as the probability that the actual gains of an event or…

Q: Define scenario analysis

A: Scenario means a situation or circumstance which is influenced by various factors. Various if and…

Q: Explain relevant risk

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

Q: Explain risk aversion

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

Q: Define business risk

A: A business risk is an inherent risk arising due to the economic activities performed by the…

Q: what is opportunity risk

A: Opportunity risk is a the risk off loosing a better opportunity i.e. if you have invested in a…

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: Define underinvestment problem

A: Underinvestment refers to the situation where company or firm has insufficient investment or can…

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: Explain the concept of risk management

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

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: Distinguish between exposure and risk.

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Q: Define value at risk (VaR)

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…