risk and return disscussion

timer Asked: Feb 8th, 2019
account_balance_wallet $15

Question Description

The most commonly used metrics of risk are: standard deviation (variance and coefficient of variation are also based on st. deviation) and beta. Explain and compare these metrics. Give couple examples when financial manager should be using each of these risk metrics.

Also, explain the purpose of diversification: what type of risks diversification helps to reduce, which risks cannot be eliminated by diversification.

Tutor Answer

School: Carnegie Mellon University

Hey! Kindly find the attached answer and in case of any issue, let me know. Thank you and all the best.

Running head: RISK AND RETURN


Risk and Return



Risk is defined as a chance in which the exact return of an investment will be different
than it is expected. In case of risk, a business is possible of losing all or some of their original
investment. On the other hand, returns are the losses or gains which are acquired from a security
in a specific period of time and they are quoted as a percentage. Generally, the most used metrics
in risk ...

flag Report DMCA

Goes above and beyond expectations !

Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors