How important is risk to returns?

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: Clearly explain the difference between systematic risk and non-systematic risk and  discuss the…

A: Risk is the possibility of loss to a company due to unforeseen circumstances. Beta is the measure of…

Q: If markets are efficient, an investor's best investment strategy involves the correct choice of

A: This is multiple choice question, in this we explained that if Market is efficient then what's the…

Q: The desired rate of return on an investment should reflect the degree of risk involved. A.   True…

A: Riskier investments may give higher returns to the investors as they provide favorable ratio of risk…

Q: Another name for the expected value of an investment would be: a. The mean value b. The risk-free…

A: The expected value (EV) is an anticipated value for investment at some point in the future. In…

Q: How would the risk premium work out for a riskier investment?

A: A risk premium is a return on venture over the hazard free rate a financial specialist requires to…

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: What is the y risk-free investment?

A: Risk-free rate of return is the rate of return that an investor expects from an investment in any…

Q: The following is a concise explanation of the primary investment risk characteristics that investors…

A: Introduction : Investing assessment and appraisal is crucial for investors because it is a kind of…

Q: If an investor prefers  investment with higher  risk , regardless to the return then he is following…

A: Risk awareness strategy is defined as the raise in an understanding in the existence of the risks…

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: Why the advantage of Portfolio analysis is it stimulates the use of externally oriented data to…

A: Portfolio analysis is defined as the study of an investment portfolio, which will also be a process…

Q: What is the risk free return?

A: Rate of return is the return percentage which an investor gets from the money which has been…

Q: omparing Value at Risk (VAR) and Expected Shortfall (ES), which is preferred by regulators for…

A: VAR that is value at risk and another is ES expected shortfall these are two methods to measure the…

Q: When it comes to investment performance, what statistical notion do many portfolio managers employ…

A: Investment performance refers to money that a person or organization earns from a particular…

Q: Basic Elements of Risk-Adjusted Returns?

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

Q: How is it possible to achieve a higher rate of return without significantlyincreasing risk?

A: As we all learnes till now that higher the risk provides higher return and if we want the high…

Q: What kind of investment is considered to be risk-free?

A: A risk-free investment is an investment that has a minimum or no fluctuation from the expected…

Q: Whenever you make an investment decision, you need to consider its impacts on the diversification of…

A: Investment decision and diversification go hand in hand. One should be careful while making an…

Q: Examine (i) the relation between market returns and investor sentiment, and (ii) the relation…

A: the relationship between the market returns investor sentiment and conditional volatility is stated…

Q: With the aid of appropriate diagram, explain the three main categories of attitude towards risk and…

A: The three main categories of attitude towards risk are: Risk averse Risk neutral Risk seeking

Q: Which one of the following is the formula that explains the relationship between the expected return…

A: The risks which is common for all business entities operating in the economic environment then 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: The value of an investment can be defined in numerous ways. Which is FALSE?  a. It is the value…

A: There are many different types valuation method of the investment some depends on the cash flow or…

Q: Which of the following investment strategies involves generating a higher expected rate of return…

A: The risk and return of investment are usually positively related. An investor cannot earn an extra…

Q: Which of the followings is NOT in the scope of investment planning? a. To develop a risk-free…

A: Financial planning is a term that refers to estimating a company's funding needs and determining how…

Q: When is the financial risk by far the most critical element to consider?

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

Q: Explain if the operational risk is considered a risk or uncertainty? Why? If it is a risk, how can…

A: Operational Loss:   The risk involved in failures of Man, Machine, Material, and Methods during…

Q: Explain what is the criterion used by a rational investor for choosing a financial investment in…

A:

Q: Answer the following questions: a) How do you handle financial risk?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 1. Define the components of holding period return. Can any of these components be negative? 2. How…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: 5. Which of the following statements best describe risk in financial planning? A. The degree of…

A: Risk in Financial planning have following features 1. Uncertainty of success or failure of…

Q: Why does Portfolio analysis stimulates the use of externally oriented data to supplement…

A: Portfolio analysis involves the analysis of the different portfolios and then selecting the best…

Q: What is the difference between future value and present value? Which approach is generally preferred…

A: Present value and future value are considered while taking investment decisions. The future values…

Q: Is there a relationship between risk and return in building an effective portfolio?(explain

A: Portfolio management involves prioritization, selection and control of projects and programs of an…

Q: Why does the advantage of Portfolio analysis it stimulates the use of externally oriented data to…

A: Portfolio analysis refers to the one of the step in portfolio management where investor determines…

Q: When assessing investment performance, what statistical notion do many portfolio managers employ to…

A: Portfolio managers are those who make investing decisions. They create and implement investment…

Q: escribes the relationship between risk and return.

A: Risk and return are directly related.

Q: Explain what is meant by beta. What risk does beta measure? What is the market return? How is the…

A: Beta is measure of risk and volatility of stock.

Q: 1.What is the relationship between an investment’s risk and its return? Please provide examples if…

A: Note:  As per our policy, we only answer one question, when more than one question is posted. The…

Q: Which of the following Incoterms (EXW, FCA, DPU, DAP) are in favor of the buyer in terms of risk?…

A: FOLLOWING INCOTERMS- EXW -EX WORKS FCA-FREE CARRIER DPU-DELIVERED AT PLACE UNLOADED DAP-DELIVERED AT…

Q: What statistical concept do many portfolio managers use to represent a risk when considering…

A: The return an individual or organisation gets from any investment portfolio is termed as investment…

Q: For which type of risk do you get rewarded with a higher expected return? a. Firm-specific risk b.…

A: Total risk = systematic risk + unsystematic risk