Q: What are the absolute measures of investment worth?
A: There are various approaches that can be utilized to decide a value or worth for the venture. Net…
Q: How is the value of an asset determined by predicted future cash flows?
A: The Answer
Q: If you introduce a risk free asset in your portfolio of risky assets; how will this change the shape…
A: In any portfolio there are two types of risk; risk from general market conditions and risks from…
Q: What is financial risk? How is it related to business risk?
A: The financial risk is the risk which is related to the non-payment of the fixed financial charges.…
Q: How do you evaluate an asset whose value is predicated on future cash flows?
A: Assets are the resources that are generally used for the purpose of revenue generation by the…
Q: xplain the difference between (a) stand-alone risk and (b) risk in a portfolio context. How are they…
A: Stand-alone In terms of how they are calculated and analyzed, risk and portfolio risk are not the…
Q: o risk premiums influence financial decisions regarding risk and re
A: Step 1 A risk premium is an investment return that is expected to generate more than the level of a…
Q: why is a need for investor to evaluate the investment ?
A: All investments will have a certain percentage of risk. To control the future risks in the…
Q: What is financial risk, and how does it arise?
A: Answer: Usually, financial risk refers to a situation where a company is not able to pay its fixed…
Q: What does it mean to adopt a maturity matching approach to financing assets, includingcurrent…
A: Maturity matching states that long period funds must be utilized to finance long period assets and…
Q: How is liquidity risk associated with the asset side of the balance sheet?
A: Liquidity risk in an asset will motivate the investor/buyer to pay a lower price for acquiring it.
Q: How do earnings and cash are useful assets with future earnings potential? Does investors tend to…
A: Earnings and cash flows are two important aspects for a company. Earnings and positive cash flows…
Q: Why should age, income, nearness to goal, risk tolerance, and existing assets be considered when…
A: Introduction : Asset portfolio refers to the group of stocks and securities that are managed and…
Q: What are the quantitative characteristics of the asset and how to measure.
A: Hello, since your question has multiple parts we will solve the first question for you. If you want…
Q: Define the term exposure to financial risk?
A: The question is based on the concept of Financial risk and its exposure.
Q: Whether the following statement is true or wrong. Briefly explain your answer. "It is impossible to…
A: The asset which has no risk associated with it is known as risk free asset. The return from risk…
Q: What is risk, and how does it affect decisions about investment?
A: Risk and return are related to each other while making investment.
Q: What is the difference between business risk and financial risk?
A: Risk Analysis: The risk analysis is defined as the process of recognizing the potential problems…
Q: What is Interest Risk and Cash Flow Risk? What is the difference between Interest Risk and Cash…
A: Risk exists in all business operations and transactions however the business should take actions to…
Q: How do you evaluate an asset whose value is dependent on future cash flow expectations
A: The Answer :
Q: What are the quantitative characteristics of the assets and how to measure them?
A: An economic resource that helps the businessman to conducting business activity effectively and…
Q: Why are rates of return superior to dollar returns when comparingdifferent potential investments?
A: A rate of return (ROR) refers to the net income or loss of an investment over a given timeframe as a…
Q: How does a firm value an asset?
A: Assets means resources of the business that the business owns. It may be tangible assets or…
Q: What is relationship between the returns on an asset and returns in the whole mark
A: A market portfolio is a theoretical concept that means a portfolio that consists of all the stocks…
Q: What is financial asset market?
A: Financial assets generally include bonds, stocks, mutual funds, cash, deposits with bank etc. These…
Q: What is the risk in the context of financial decision making and performance?
A: Financial decision making: Financial decision making denotes to decision making concerning financial…
Q: How is each type of risk used in the capitalbudgeting process?
A: Risks in capital budgeting is nothing but uncertainty about the future profitability of a project.…
Q: Why doesn’t an estimated absolute covariance number tell the investor much about the relationship…
A: Sample Covariance means the in which the investor has not much information about the rate of return…
Q: Could you explain the term "financial risk" in simple terms
A: Financial risk - The risk of losing money on an investment.
Q: A reasonable probability that an investment will produce a loss a. risk b. value c. specualtion…
A: There are several investment styles through which one can generate profits or build wealth.
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: Describe the principles of asset valuation. Distinguish between the required rate of return and…
A: Asset Valuation means that a company or business is studied to understand what will be the intrinsic…
Q: When adding a risky asset to a portfolio of may risky assets, which property of the asset has a…
A: Portfolios can consist of a variety of investments such as equities, bonds, commodities, cash and…
Q: Illustrate how risk related to investment
A: There is a direct relationship between risk and return in investment decision making. It means…
Q: What is the best way to measure of risk for an asset held in isolation, and which is the best…
A: The "coefficient of variation" is the ideal indicator of the hazard of an individual asset.…
Q: What is Interest Risk and Cash Flow Risk?
A: Risk exists in all business operations and transactions however the business should take actions to…
Q: How important is risk to returns and what are the key elements that must be analyzed in this regard…
A: Risk: The Cambridge dictionary gives one of the meanings of the word "risk" as: "to do something…
Q: Why is the fixed asset riskier than current asset?
A: In financial accounting, the company's financial statements assets are classified into two…
Q: . How does one determine the value of any assetwhose value is based on expected future cash flows?
A: If there is an order of anticipated upcoming cash flows, cash flow technique is one of the finest…
Q: How to deal with financial risk
A: Financial risk is always present in business situations but one thing we can do it that we can…
Q: arbitrage profit can an investor earn on an investment value
A: In order to earn arbitrage profit we first need to decide which currency to borrow and which to…
Q: What are the three sources, the owner of a risky asset should expect to earn a return from?
A: An asset which does not provide fixed rate of return is known as risky asset. The returns provided…
How do investors account for risk when determining an asset’s value?
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Solved in 2 steps
- How does one determine the value of any asset whose value is based on expected future cash flows?Define the term exposure to financial risk?What are the quantitative characteristics of the asset and how to measure. How does one asset in the same portfolio influence the other one in the same portfolio. What could be the influence of this relationship to the investor's portfolio? What is relationship between the return on an asset and returns in the whole market (market portfolio)?
- What is the risk free rate implied by these assets?Describe the principles of asset valuation. Distinguish between the required rate of return and expected rate of return. Based on the asset valuation, how do the investors make investment decisions using the required rate of return?How do investors reduce investment risk by asset allocation and diversification?
- Explain what is the criterion used by a rational investor for choosing a financial investment in terms of its risk return combination.A reasonable probability that an investment will produce a loss a. risk b. value c. specualtion d. capital gainHow do you evaluate an asset whose value is dependent on future cash flow expectations?