Describe the relation between Risk and Returns that was introduced by Harry Markowitz

Q: Explain how knowing the standard deviation of a security’s historical returns increases an…

A: The question is based on the concept, which establish relation between return and risk for…

Q: List which of the following statement(s) concerning risk are correct? I. Nondiversifiable risk is…

A: Risk is a factor which arises due to uncertain future factors. It can be generated through external…

Q: (a) Compute and identify the stock that has the most systematic risk. (b) Compute and justify the…

A: It has been given in the question that the risk premium is the 7.5% and the risk-free rate of return…

Q: f cor

A: Introduction : In statistics, correlation or dependency refers to any statistically link among two…

Q: Differentiate between (a) stand-alone risk and(b) risk in a portfolio context

A: Investors can categorize the risks in two types. One is diversifiable risk and other one is…

Q: What is Pure Risk and Speculative Risk ? Give me some examples What is Fundamental and particular…

A: Risk refers to the probability of loss that could occur due to the volatility present in the…

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: Briefly explain the fundamental trade-off between risk and return.

A: Fundamental trade-off among risk and return: Higher risk is related with larger chance of advanced…

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: How to compare other measures of risk with VaR(value at risk

A: VAR or Value at Risk is quantitative risk measurement in portfolio or firm this measures and also…

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: The higher a security's risk, the higher the return investors demand, and thus the less they are…

A: Risk on security is defined as the risk of not getting actual return as per the expectations of the…

Q: Which is risk in the context of financial decision making and performance? Does performance…

A: Risk in the perspective of financial decision making and performance differs as the company faces…

Q: Discuss the difference between Systematic Risk and Unsystematic Risk. What kind of strategies we can…

A: Risk in finance is the situation that may or may not arise in the future and has an impact on the…

Q: Explain the relationship between risk and return in portfolio management!

A: Risk refers to an adverse possibility of something to get happen. Risk is the possibility of loss.…

Q: quantitative risk analysis:

A: Quantitative risk analysis assess the risk associated with a particular monetary item.

Q: Define the term Trade-Off between Risk and Reward?

A: Risk-Reward trade off refers to an investment principle which indicates higher the risk, higher is…

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: Basic Elements of Risk-Adjusted Returns?

A: Introduction: Risk adjusted return is a methodology for calculating and evaluating the returns on an…

Q: iation of a security’s historical returns increases an investor’s underst

A: A standard deviation is a tool used in finance to measure the volatility and risk associated with a…

Q: Briefly define and give examples of each of the following components of total risk. Which type of…

A: Risk refers to the variability of returns. It is the possibility or the likelihood that the actual…

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

A: Definition

Q: What is the difference between systematic risk and unsystematic risk? Give an example of each.

A: Risk: The possibility that the actual outcome in a situation will differ from the expected outcome…

Q: Cakulate the expected retun and risk of a portfolio

A: Portfolio Risk: Portfolio risk is the measurement of variance between the assets and the targeted…

Q: Explain the Trade-Off between Risk and Reward?

A: The trade-off means to lose one thing to achieve another thing. For example An organization is…

Q: What is the purpose of NPV analysis? Be sure to discuss the concepts of risk and return in your

A: Net present value NPV is used quite extensively in capital budgeting decisions whether to accept or…

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: discuss the importance of considering risk when analyzing investments?

A: Risk refers to the probability of uncertainties about future .Risk may also be termed as volatility…

Q: What is standard deviation? What type of risk does it measure

A: Standard deviation measures the risk of an investment regarding how it will fluctuate or deviate…

Q: . risk B. risk management C.hed

A: Step 1   The process of detecting, analyzing, and managing corporate finances and profits is known…

Q: b) Give a graphical example to present the positioning of. E Systematic risk E Risk free rate of…

A: Risk is the uncertainty associated with an investment. The investor receive higher return to…

Q: Provide a descriptive formula for each of the following (e.g., Total risk =?+?):   a. Total risk=…

A:

Q: rive CAPM and explain the concept of systematic risk

A: Systematic Risk – These are market risks—that is, general perils of investing—that cannot be…

Q: Critically discuss the application of EWMA, GARCH and asymmetric GARCH models to volatility…

A: Volatility should be forecastable using a volatility model. Almost all financial applications of…

Q: Describe 2 main results of the Markowitz Portfolio Theory and how they relate to risk management.

A: Risk management is the process through which risk is analyzed and various strategies are implemented…

Q: What is the difference between Beta and Standard Deviation as a measure of risk?

A: Risk can be divided into two categories- unsystematic risk and systematic risk. Risk is measured in…

Q: escribes the relationship between risk and return.

A: Risk and return are directly related.

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: One of the characteristics of an insurable risk is that a risk needs to be determinable and…

A: An insurable risk class is a group of people or businesses with similar characteristics that are…

Q: what does high value of standard deviation mean on risk-return ratio

A: Risk-return ratio is the ratio which shows the risk which an investor will get for having one unit…

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.