Risk is: A. derived from the idea of getting something back from an investment. b. the...
Risk is:
A. derived from the idea of getting something back from an investment.
b. the reward for investing
c. the uncertainty about the return we will earn
d. net income divided by average total assets
E. unrelated to return expected
Homework Answers
|
Option C is the answer Risk is the uncertainty about the return we earn. Risk is something that cannot be avoided in the capital market. It is closely associated with return rate, generally speaking higher the risk, higher the return expectations. |
||
Add Answer to:
Risk is:
A. derived from the idea of getting something back from an
investment.
b. the...
Here is the text book information, trend needs to be return on investment Calculate one financial...
Here is the text book information, trend needs to be
return on investment
Calculate one financial statement ratio trend within your industry that warrants improvement efforts. Make up your own. Return on Investment LO 2 Explain the importance and show the calculation of return on investment. Imagine that you are presented with two investment alternatives. Each investment will be made for one year, and each investment is equally risky. At the end of the year you will get your original...
What are her expected returns and the risk from her investment in the three assets? How...
What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets: ? M alone? Hint: Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O. What is the expected return of investing equally in all three assets M, N, and O? %...
We have discussed in class the idea that one may measure an investor's risk tolerances to...
We have discussed in class the idea that one may measure an investor's risk tolerances to different investment scenarios and then develop a mathematical model to describe the satisfaction or utility that an investor derives from his or her investments. This mathematical function is typically called a "utility" function and greater values of utility mean greater investor satisfaction. Consider the following investor utility function U = E(r) - (A/2)o where U is the inventor's utility, E() is a portfolio's expected...
Investment Theory 4. Your current portfolio of $750,000 is fully diversified, yielding an expected monthly return...
Investment Theory
4. Your current portfolio of $750,000 is fully diversified, yielding an expected monthly return of 0.67% with a monthly return volatility of 2.37%. You expect to inherit $250,000 of company A stock, which has an expected return of 1.25% a month and a monthly return standard deviation of 2.95%. The correlation of stock A with your current portfolio is 0.4. a. Assuming you keep the stock, compute the monthly expected return and standard deviation of the new portfolio...
1. Which of the following capital investment evaluation methods use present values? A. Net present value...
1. Which of the following capital investment evaluation methods use present values? A. Net present value method B.Average rate of return method C. Both "Net present value method" and "Average rate of return method" D. Neither "Net present value method" nor "Average rate of return method" 2. A common characteristic found in capital investment evaluation methods that use present values is ________. no interest rate an interest rate their ease of use None of these choices are correct. 3. Assume that...
Ch 02: Assignment - Risk and Return: Part 1 Term Answer Risk A Expected rate of...
Ch 02: Assignment - Risk and Return: Part 1 Term Answer Risk A Expected rate of return B Description The rate of return expected to be realized from an investment, calculated as the mean of the probability distribution of its possible returns. The term applied to the risk of an asset that is measured by the standard deviation of the asset's expected returns. The possibility that an actual outcome will be better or worse than its expected outcome The general...
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $160,000...
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $160,000 or $400,000 with equal probabilities of 50%. The alternative risk-free investment in T-bills pays 5% per year. a. If you require a risk premium of 8%, how much will you be willing to pay for the portfolio? b. Suppose that the portfolio can be purchased for the amount you found in (a). What will be the expected rate of return on the...
Select the item that matches with the description. Terms b. C. d. Descriptions Begins with net...
Select the item that matches with the description. Terms b. C. d. Descriptions Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows. Item included in net income, but excluded from net operating cash flows. Net cash flows from operating activities divided by average total assets. Cash transactions involving lenders and investors. Cash transactions involving net income. Cash transactions for the purchase and sale of long-term assets. Purchase of long-term assets...
Assignment Chapter 12- Investing in Stocks and Bonds s Back to Assignment Attempt Keep the Highest:...
Assignment Chapter 12- Investing in Stocks and Bonds s Back to Assignment Attempt Keep the Highest: 13 3. Forecasting stock value Understanding the returns from investing hen buying stock, you can expect to earn money through future current income (from ) and future capital appreciation (from ). Together, your l earnings from a given investment can be expressed in terms of the approximate yield. This value makes it easier for you to compare investment options. tota Understanding the Approximate Yield...
B. MICFUELUNUML U C. idiosyncratic risk CD. systematic risk 0.5. Which of thes A. II,IV B....
B. MICFUELUNUML U C. idiosyncratic risk CD. systematic risk 0.5. Which of thes A. II,IV B. II,IV.v C. 1,111,1V ck A and Z have a correlation 05 D. 1,111, E. I, 3 Stock A and Stock B have a correlation Correlation-0.7, Stock A and Z have than a portfolio of story are an in is part of market A. Stock A and Z have a stronge CB. A portfolio of stock A and B P C C. Stock A and...
Here is the text book information, trend needs to be
return on investment
Calculate one financial statement ratio trend within your industry that warrants improvement efforts. Make up your own. Return on Investment LO 2 Explain the importance and show the calculation of return on investment. Imagine that you are presented with two investment alternatives. Each investment will be made for one year, and each investment is equally risky. At the end of the year you will get your original...
What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets: ? M alone? Hint: Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O. What is the expected return of investing equally in all three assets M, N, and O? %...
We have discussed in class the idea that one may measure an investor's risk tolerances to different investment scenarios and then develop a mathematical model to describe the satisfaction or utility that an investor derives from his or her investments. This mathematical function is typically called a "utility" function and greater values of utility mean greater investor satisfaction. Consider the following investor utility function U = E(r) - (A/2)o where U is the inventor's utility, E() is a portfolio's expected...
Investment Theory
4. Your current portfolio of $750,000 is fully diversified, yielding an expected monthly return of 0.67% with a monthly return volatility of 2.37%. You expect to inherit $250,000 of company A stock, which has an expected return of 1.25% a month and a monthly return standard deviation of 2.95%. The correlation of stock A with your current portfolio is 0.4. a. Assuming you keep the stock, compute the monthly expected return and standard deviation of the new portfolio...
Ch 02: Assignment - Risk and Return: Part 1 Term Answer Risk A Expected rate of return B Description The rate of return expected to be realized from an investment, calculated as the mean of the probability distribution of its possible returns. The term applied to the risk of an asset that is measured by the standard deviation of the asset's expected returns. The possibility that an actual outcome will be better or worse than its expected outcome The general...
Select the item that matches with the description. Terms b. C. d. Descriptions Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows. Item included in net income, but excluded from net operating cash flows. Net cash flows from operating activities divided by average total assets. Cash transactions involving lenders and investors. Cash transactions involving net income. Cash transactions for the purchase and sale of long-term assets. Purchase of long-term assets...
Assignment Chapter 12- Investing in Stocks and Bonds s Back to Assignment Attempt Keep the Highest: 13 3. Forecasting stock value Understanding the returns from investing hen buying stock, you can expect to earn money through future current income (from ) and future capital appreciation (from ). Together, your l earnings from a given investment can be expressed in terms of the approximate yield. This value makes it easier for you to compare investment options. tota Understanding the Approximate Yield...
B. MICFUELUNUML U C. idiosyncratic risk CD. systematic risk 0.5. Which of thes A. II,IV B. II,IV.v C. 1,111,1V ck A and Z have a correlation 05 D. 1,111, E. I, 3 Stock A and Stock B have a correlation Correlation-0.7, Stock A and Z have than a portfolio of story are an in is part of market A. Stock A and Z have a stronge CB. A portfolio of stock A and B P C C. Stock A and...
Most questions answered within 3 hours.
-
On a recent quiz, the class mean was 75 with a standard
deviation of 2.2. Calculate...
asked 3 minutes ago -
Discuss the Coefficient of Restitution in an elastic collision
compared to the Coefficient of Restitution in...
asked 7 minutes ago -
Pretend that you are
the audit manager on an annual financial statement audit engagement
for a...
asked 16 minutes ago -
A certain lens focuses light from an object 1.65 m away as an
image 41.8 cm...
asked 16 minutes ago -
Which metal has a resistivity that is within the range or
closest to 4.2X10^-6 to 4.7X10^-6...
asked 21 minutes ago -
5.) Suppose a researcher collected data on the mean height of
tomato plants grown in organic...
asked 34 minutes ago -
(b) A medical statistician wants to estimate the average weight
loss of people who are on...
asked 39 minutes ago -
In scala,
Can you explain what is the difference between them, and why the
first one...
asked 39 minutes ago -
True (T) or False (F) Questions
In a queuing system, if the system’s utilization is 100%,...
asked 48 minutes ago -
What is the total energy transported per hour along a narrow
cylindrical laser beam 1.60 mm...
asked 57 minutes ago -
Key Assessment PAT 6: Sayles Chapter 14 Application Exercise
2
Beginning January 1, Community Hospital had...
asked 1 hour ago -
Let's assume the following data represents the time from when a
patient is discharged from North...
asked 1 hour ago