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

Q: what is risk and return in the context of financial decision making?

A: Risk and return are two very important concept used in any financial decision making. Two financial…

Q: What is investment timing option?

A: Option with reference to investment or project refers a significant option that can affect the…

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: What does a failed net-investment test indicate?

A: Answer: Net investment test: The company will not overdraw at any stage on its return, and is thus…

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: How does an investment appraisal technique help companies move in the right direction regarding an…

A: Investment evaluation is significant for brokers since it is a type of principal examination and,…

Q: What are the risks of investing in an ESOP?

A: ESOP stands for Employee Stock Ownership Plan. It is a plan that gives an ownership interest in the…

Q: What is the capital asset pricing model (CAPM)? What does it tell us about the required return on a…

A: The required rate of return of a security is the minimum return an investor will demand from the…

Q: Explain the difference between risk and uncertainty in the context of investment appraisal, and…

A: Investment means engaging your funds to generate income for the future. Return from the investment…

Q: Which variables are to consider before making an investment decision? Describe about them.

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: What is an investment center manager's advise if the firm intends to adopt the return on investment…

A: This question explains about an investment center manager's advise if the firm intends to adopt the…

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 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: 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: capital controls, which investment would you choose? What are the risks associated with this trade?

A: The United States has always been ranked among the best in the world for its competitiveness and…

Q: What is financial risk?

A: Risk refers to the undesired consequences arises due to the uncertainty. In other words, risk refers…

Q: How behavorial bias affect investment behavior?

A: Behavioral bias is the belief by the investors that unknowingly affects the investors investment…

Q: Explain the investment pool?

A: Investment Pool: Investment Pool is the joint funds that is planned financial arrangements for a…

Q: Factors affecting investment decisions

A: Introduction: The Investment decision is the decision taken by shareholders or top-level management…

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: How the risk and return trade-off can be applied in real life?

A: The risk-return tradeoff states that the return rises with an increase in risk. Investors use this…

Q: why is a risk analysis important to the capital investment decision making process?

A: Risk is the uncertainty or possibility of loss due to the decision in investment process. Of all the…

Q: What are the issues that a finance manager considers in taking investment decision?

A: The term investment decision refers to the decisions that are related to how the funds of the…

Q: which investment is preferable?

A: The present value is the present worth of the amount that will be paid or received at present.

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: What is risk? Why must risk as well as return be considered by the financial manager who is…

A: Risk is associated with every business it is one of the important functions of the management to…

Q: How does the capital asset pricing model (CAPM) influence financial decisions regarding risk and…

A: CAPM is related to the connection between the securities and their expected returns. CAPM is…

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: Comment on the use of probability in investment decision process.

A: Use of probability is a very important tool when it comes to making decisions with regards to…

Q: How does the risk return trade-off relate to the financial manager's main goal?

A: The main goal for a financial manager is to generate the maximum value of the firm to its owners.…

Q: What is investment strategy?

A: Investment strategies are generally used by the investors in order to protect themselves from any…

Q: Explain the difference between financial risk andbusiness risk.

A: Risk is referred as the chance of loss. An activity which leads to loss is termed as risk. The risk…

Q: Why should both quantitative and qualitative factors be considered in capital investment decisions?

A: The Investment commitment on any project is based on many factors which are classified as…

Q: When comparing the performance of two investment alternatives, which characteristics of investments…

A: For comparison any investment alternative main thing required for Cashflow and certainty of cash and…

Q: biases seriously affect investor's analysis and investment decisions? How

A: Behavioural biases are nothing but irrational behaviour or beliefs that can subconsciously affect…

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 hedging and how is it different from diversification? If a firm needs to manage its risk,…

A: A hedge is an investment that is made fully intent on diminishing the danger of unfriendly value…

Q: What does “investment risk” mean?

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…

Q: Why are statistical approaches and tools important in investment decision-making?

A: This question explains about the statistical approaches and tools that are important in investment…

Q: What are investment activities? Give some examples?

A: Statement of cash flow: It refers to a financial statement that shows all the cash payments and…