Top Menu

Archive | Risk and Return

4 Main Sections of Risk and Return Relationship

This article throws light upon the four main sections of risk and return relationship. The sections are: 1. Risk and Return of a Single Asset 2. Risk and Return of a Portfolio 3. Capital Asset Pricing Model (CAPM) 4. Arbitrage Pricing Theory. Section # 1. Risk and Return of a Single Asset: Return on Investment: […]

Top 4 Asset Pricing Implications of CAPM

This article throws light upon the top four asset pricing implications of CAPM. 1. The CAPM has asset pricing implications because it tells what required rate of return should be used to find the present value of an asset with any particular level of systematic risk (beta). In equilibrium, every asset’s expected return and systematic […]

Risk and Return (With Diagram)

After reading this article you will learn about the relationship between Risk and Return. The entire concept of security analysis is built on two concepts of security: return and risk. To earn return on investment, investment has to be made for some period which in turn implies passage of time. Dealing with the return to […]

Risk and Expected Return (With Diagram)

After reading this article you will learn about the relationship between Risk and Expected Return. There is a positive relationship between the amount of risk assumed and the amount of expected return. Greater the risk, the larger the expected return and the larger the chances of substantial loss. Investments which carry low risks such as […]

How to Measure Risk? (With Formula)

This article throws light upon the top four methods of measurement of risk. The methods are: 1. Range Analysis 2. Probability Distribution 3. Standard Deviation 4. Coefficient of Variation. Method # 1. Range Analysis: Where different returns from an asset are possible under different circumstances, more than one forecast of the future returns may be […]

free web stats