The desired rate of return on an investment should reflect the degree of risk involved. A.   True B.   False

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: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…

A: This question explains about the present value of benefits surpasses and the cost of an investment…

Q: Which of the following statements is correct concerning a mean-variance efficient portfolio of risky…

A: Every investor expects a higher return for a high level of risk they take. Investors who are willing…

Q: How do an investment's required rate of return vary with perceived risk? Explain with an example?

A: Required rate of return refers to the rate which the investors expects from their investments. This…

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: Critically evaluate the importance of the standard deviation factor in comparing investments.

A: Standard deviation helps the investor to measure the volatility of the market. It helps an investor…

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: 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: 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: Can the risk premium be negative after an investment is undertaken or before?

A: The risk premium is the extra risk-free return to require the risk of project acknowledgment. This…

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: 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: What is risk, and how does it affect decisions about investment?

A: Risk and return are related to each other while making investment.

Q: Describe the affects of the present value of an investment.

A: Present value of the investment: Present value of the investment is calculated using the cash flows…

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: 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: Make a simple example of the following: a. Capital Gain (or Losses) b. Expected Return c. Real…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: The expected value of an investment: Answer a. Is what the owner will receive when the investment is…

A: Expected Return refers to return anticipated by an investor while making investment. It may differ…

Q: In pursuing one’s investment objective, which is specified in terms of return requirement and risk…

A: Investment is an activity that is engaged in by people who have savings. It can be in two forms such…

Q: What is the relationship of risk to the investment?

A: There is a direct relationship between risk and return in investment decision making. It means…

Q: Speculation tends to have a high risk and high rate of return compared to investment Select one: O…

A: The main target in both the cases are making profit, however there are major differences between the…

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: Risks that are insurable because their probabilities can be calculated precisely enough for the risk…

A: An insurable risk, that might comprise possibility of loss that is unexpected and outside the…

Q: A realized return is the rate of return actually earned on an investment. Group of answer choices…

A: Return: Return is defined as the money attained or lost on an investment through certain time…

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: identify the assumptions underlying the interest coverage ratio appropriate measure for analyzing…

A: The interest coverage ratio is a debt ratio and profitability ratio used only to calculate how…

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: Another name for the expected value of an investment would be: Answer a. The mean value b. The…

A: An Expected Value is an anticipated value for an investment at some point in future.

Q: How important is risk to returns?

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

Q: The risk-adjusted discount rate reduces investment. True or false?

A: The estimation of the present value of cash for high-risk investment is known as a risk-adjusted…

Q: In general, the the correlation between asset returns, the the risk reduction that investors can…

A: Correlation measures the extent to which two variables are interrelated. The correlation coefficient…

Q: Is the investment risk concerned with the range of possible outcomes from aninvestment?

A: For a business, there are many types of risks associated with it. Some of the risks are credit risk,…

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 relationship between risk and return?

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

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: Illustrate investment risk?

A: Investment risk is the risk associated with the probability of losses occurring in relation to the…

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