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

Q: Risk can be subdivided into systematic and unsystematic risk. Describe each type of risk, the…

A: Systematic risk is the market risk or the undiversifiable risk of the asset which is unavoidable.…

Q: Risk management focuses on what?

A: Organizations assess the stakeholder’s responses as risks or opportunities which would affect the…

Q: Define Risk aversion

A: A risk averse saver is an investor who favors inferior returns with recognized risks somewhat than…

Q: What is risk? What is the difference between systematic and unsystematic risk?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: Standard deviation is measure of total risk while BETA is measure of systematic, undiversifiable…

A: Because you have asked multiple questions, we will solve the first question as per policy. Request…

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: 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: 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: quantitative risk analysis:

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

Q: which of the following headings best describes and measures gearing : a- financial position (risk)…

A: Gearing ratio is a financial ratio which compares equity of a company to its debt. Gearing ratio =…

Q: Which of the following statements is true for compensation of risk? a. Higher the risk, lower is the…

A: The Statement for compensation of risk is as under-

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

A: Modern portfolio theory, or MPT, is referred to as the method for portfolio management for reducing…

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: What type of risk is measured by the standard deviation?

A: Standard deviation is the measure of risk that the actual return of an investment will deviate from…

Q: Is funding a type of risk?

A: Funding means providing the funds to the party and charging interest rates from them. Firms need…

Q: averse

A: Risk is involved in everything. Risks will be there right from the task that we do till the…

Q: Explain the specific relationship between risk and reward and why this relationship must be true.

A: Risk refers to probability for loss of investment value by an investor whereas Reward refers to…

Q: How are total risk, nondiversifiable risk, and diversifiable risk related? Why is nondiversifiable…

A: Total risk is measured by the standard deviation of returns; it has two elements non-diversifiable…

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: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

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

A: Beta captures the systematic risk of the security. There exists an important formula in financial…

Q: What does a project’s stand-alone risk reflect?

A: Stand alone risks are risks that are associated with a particular asset or a project. Companies when…

Q: Standard deviation measures which type of risk?

A: Standard deviation is an important measure of risk in finance.

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: 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: 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: What is the relationship between risk and return?

A: Risk return relationship: The association among risk and return is recognized as the risk-return…

Q: Compare speculative risk and pure risk.

A: Pure Risk is the possibility where there is loss or no loss. Speculative risk  is a possibility of…

Q: What is value at risk, VaR?

A: Value at Risk (VaR) is a financial metric that estimates the risk of an investment. More…

Q: Give an example of a risk that is clearly a diversifiable risk and one that is clearly a…

A: It refers to risk that can be eliminated through diversification. Those risks are firm specific,…

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: Q1- What is a probability impact matrix? Q2- how to make a risk assessment matrix? Q3- how to use…

A: Probability impact matrix is 2 dimensional graphic risk assessment tool based on chances on…

Q: Define conditional value at risk (CVaR)

A: The question is based on the concept of conditional value at risk , it is a risk assessment process.…

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: 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: For any given distribution of outcomes and probabilities, describe how preferences over risk affect…

A: An outcome is a potential result of an experiment in probability theory. The likelihood of an event…