Suggest what is the best financial instrument to offset market risk exposure and from market volatility? WHY?

Q: What’s the risk of competition on financial markets and institutions profitability?

A: Competitive risk or Risk of Competition is the force that will hinder the organization in achieving…

Q: explain efficient Market Hypothesis" and "Behavioral Finance" briefly.

A: Efficient market hypothesis (EMH): The efficient market hypothesis (EMH), too known as the efficient…

Q: Explain the Opportunistic Investing strategies?

A: Opportunistic investing strategies are strategies that involve investment in highly risky…

Q: How can herding behavior and behavioral financecontribute to market bubbles?

A: Herding behavior indicates how investors tend the actions of a larger number of investors group,…

Q: Explain both the historical and the forward-looking approaches toestimating the market risk premium.

A: Historical market risk premium is the difference between the returns of the risk free securities and…

Q: Why a risk taker (likes to take risk) type of investor prefer equities over fixed income?

A: Risk takers are the individuals who are willing to take risk besides the consequences comes with it.…

Q: How does the emergence of interest-rate risk helpexplain financial innovation?

A: Interest rate risk is defined as the risk that is faced by the bond holders because of the changing…

Q: Using examples, explain how firms are affected by both systematic and firm-specific risk. What is…

A: There are two types of risk systemic risk and firm specific risk.

Q: How to analysis the Liquidity in Finacial Market analysis?

A: Liquidity is the availability of the current assets to fulfill the current liabilities of the…

Q: Is the risk-free rate the Treasury yield?

A: The risk-free rate refers to the rate of return on an investment that is having zero risk of loss.…

Q: What is the reason for investors to track moves in the yield curve? Please discuss in more depth and…

A: A yield curve is a graphical representation of the different interest rates that the bonds yield but…

Q: Explain how behavioural finance is related to market anomalies

A: Behavioural finance is the study of the behaviour of investors in making investment decisions.…

Q: What are the major drivers of portfolio-level credit risk?

A: Financial institutions are frequently mapping and controlling the risk from credit exposures at…

Q: Explain how behavioural finance is related to market anomalies.   **Please provide website link or…

A: Behavioral finance is a study in finance which examines the investor's behavior in making investment…

Q: Discuss the problems of identifying speculative bubbles in markets

A: A speculative bubble is a sudden increase in the price of an asset, asset class, or industry due to…

Q: What is definitions of this?   Systematic risk  Risk free rate of return  Market rate of…

A: Capital asset pricing model (CAPM) can be used to compute the return expected by the investors by…

Q: How does the diversification of an investor’s portfolio avoid risk?

A: Portfolio investments mean investments in the group of assets, securities, bonds, etc. Investments…

Q: Calculate and label the market risk premium

A: Security Market Line or SML is the upward sloping straight line. This line is the graphical…

Q: What is market risk premium?

A: Market risk premium is an additional return investor will receive for holding the additional risk in…

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: portant topic that usually only economists observe.

A: Basically, risk the executives happens when an investor or fund manager investigates and endeavors…

Q: Discuss the advantages and disadvantages of options in the financial markets?

A: Options refer to a financial contract that gives the buyer the right and not the obligation to buy…

Q: Provide some idea of the effect of the sensitivity of security prices to changes in market interest…

A: Sensitivity of interest rate (IR) is a technique of measuring change in the price of securities in…

Q: What is the difference between a diversifiable riskand a nondiversifiable risk? Should stock…

A: The diversifiable risk or unsystematic risk: It may be a kind of risk particular to a given economy,…

Q: Explain how the futures markets can be used to reduce interest rate and input price risk.

A: A contract in which a seller & a buyer has an obligation to sell or buy an asset for a…

Q: How can a firm’s managers influence market risk as reflectedin beta?

A: Beta:  It is the measurement of volatility of a stock compared to the market movements. A stock with…

Q: What is liquidity black holes?

A: Liquidity is when assets can be easily traded in the market with no compromise in the price of the…

Q: What are the TRIN Statistics and Cofidence Index and what do their values describe about the bullish…

A: The Trading Index is also known as Arms index. The name Arm’s index is decided on the name of the…

Q: What is attribution analysis and how can it be used to distinguish between a portfolio manager"s…

A: A portfolio is the combination or group of various investments of an investor that are placed in one…

Q: Define market risk premium

A: Market risk premium  It is defined as a variance between an expected rate of returns on the market…

Q: What is the importance of market risk premium?

A: Market risk premium Variance of the market return and the risk-free rate. It depicts the equity…

Q: Explain the term Market Timing strategies?

A: THE MARKETING TIMING STRATEGIES IS GIVEN BELOW-

Q: Suggest what is the best financial instrument to offset market risk exposure and from market…

A: Derivatives are considered as the best financial instruments to offset the exposure of market risk…

Q: How are total risk, market risk, and diversifiable risk related?

A: There are different types of risk associated with the investment. Some can be controlled and some…