Define systematic and unsystematic risk. What method is used to measure a firm's market risk?

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: Clearly explain why some risks are systematic and others non-systematic. How is it possible for an…

A: There are various types of risks that are faced by organizations in order to conduct its day to day…

Q: Explain what is the risk component of financial assets.

A: Risk can be described as the likelihood of an unexpected or negative outcome. Any act or activity…

Q: Among the factors considered in the quantitative models of default risk: a. Business cycle b.…

A: Business cycle is defined as an economic cycle that is linked with fluctuation of the GDP in its…

Q: What is the risk-return tradeoff that arises when . firm manages its working capital? Give tangible…

A: Financial risk is referred as the possibility or chance of losing the investment, basically an…

Q: Which of the following is the risk due to a firm's industry?      Business risk     Financial…

A: In the ever-changing landscape of finance and investments, understanding different types of risks is…

Q: What is financial risk? How is it related to business risk?

A: The financial risk is the risk which is related to the non-payment of the fixed financial charges.…

Q: What is forecasting risk? Why is it a concern for the financial manager?

A: A financial manager can be considered a professional with the responsibility of overseeing the…

Q: Which of the following is the risk due to a changes in the stock market?      Business risk…

A: The investments that we make in debt, equity and other financial securities are exposed to different…

Q: Which of the following factors is most likely to affect the level of systematic risk in a portfolio?…

A: Systematic risk-It is a risk that is impossible to completely avoid as the risk is inherent to the…

Q: Describe the capital asset pricing model and explain the role of beta as a risk measurement tool.

A: Answer

Q: Critically discuss the effect of diversification on portfolio risk. Is there any limit of…

A: A portfolio is the mixture of securities managed by the portfolio manager. We can take the amount in…

Q: What type of risk is the risk that is unique to an individual firm?     Systematic risk…

A: There are different types of risks that are associated with investments like risk of change in state…

Q: How to analysis the Liquidity in Finacial Market analysis?

A: Liquidity is the availability of the current assets to fulfill the current liabilities of the…

Q: What are the quantitative characteristics of the asset and how to measure.

A: Hello, since your question has multiple parts we will solve the first question for you. If you want…

Q: How is risk defined and measured? How might the magnitude of the market risk premium impact…

A: In financial terms, the risk is referred to as the possibility that an outcome's actual gains will…

Q: How do investors account for risk when determining an asset’s value?

A: Asset valuation helps to determine the fair value of the asset. Various asset valuation models such…

Q: Describe how Investment Managers measure the non-systematic risk of their portfolio

A: Non-systematic risk refers to firm specific risk factors. This type of risk is usually eliminated or…

Q: When it comes to investment performance, what statistical notion do many portfolio managers employ…

A: Investment performance refers to money that a person or organization earns from a particular…

Q: What is Competitiveness and how it affects financial market. Identify the risks that may arise.

A: The search for long-term competitive advantage is an important part of all business activity – one…

Q: What is relationship between the market risk of a stock and it's expected return?

A: Expected return is directly related to the market risk . Market risk is represented by beta. Higher…

Q: Briefly comment on what the CAPM is for, and how it is used. How (by what) is risk measured in the…

A: The question is related to Capital Asset Pricing Model. This model was developed by Sharpe Mossin…

Q: Suggest what is the best financial instrument to offset market risk exposure and from market…

A: The question is based on the concept of hedging the market risk and volatility by use of a proper…

Q: How does the diversification of an investor’s portfolio avoid risk?

A: Portfolio investments mean investments in the group of assets, securities, bonds, etc. Investments…

Q: What is relationship between the returns on an asset and returns in the whole mark

A: A market portfolio is a theoretical concept that means a portfolio that consists of all the stocks…

Q: How do you perceive the relationship between risk and return in the context of investment…

A: The relationship between risk and return is a fundamental concept in finance and investment. In…

Q: Which of the following risks is also known as market risk?  a.interest rate risk   b. systematic…

A: Market risk is the risk of a probability of loss for an entity due to factors which impact the…

Q: Define each of the following terms: d. Stand-alone risk; corporate (within-firm) risk; market (beta)…

A: Projects of the company are usually subject to three types of risks; they are standalone risk,…

Q: Explain what is the criterion used by a rational investor for choosing a financial investment in…

A:

Q: Market risk arises from the level or volatility of market prices of assets. It involves the exposure…

A: Market risk is the chance of suffering losses as a result of price changes that are unfavorable for…

Q: What is liquidity black holes?

A: Liquidity is when assets can be easily traded in the market with no compromise in the price of the…

Q: What is equity risk premium?

A: The risk premium is the extra return an investor receives for taking market risk. We know that risk…

Q: risk transformtion in banks

A: Risk is a term that is used for defining the uncertainty arising in the future from changes in…

Q: Is there a relationship between risk and return in building an effective portfolio?(explain

A: Portfolio management involves prioritization, selection and control of projects and programs of an…

Q: Please select the risk that affect only a single company? market risks. specific risks. systematic…

A: Systematic risk is also known as non-diversifiable risk, and it exist for entire market. It arises…