When comparing investments that have different means, the measures the relative riskiness of each investment and is a better indicator of risk than the standard deviation.

Q: What is a benchmark and why is there a need to compare the fund's return vis-a-vis a benchmark?

A: Benchmark is considered as a standard against which the actual performances of the securities are…

Q: hich of the following would not be acceptable as a measure of basic investment risk? a)Expected…

A: Risk is always there when you invest in stock returns and risk is volatility of returns and change…

Q: Does the accounting (book) rate of return (ARR) method provide a valid (or, meaningful) measureof…

A:

Q: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…

A: This question explains about the present value of benefits surpasses and the cost of an investment…

Q: When using present worth to evaluate the attractiveness of a single investment alternative, what…

A: To calculate the attractiveness of investment there is need to calculate the present worth is…

Q: Investors require a _____ return as compensation for taking ____ risk. A) higher, margin B)…

A: Risk is the possibility that the actual return on any investment made might be different from the…

Q: Consider the advantages and disadvantages of using the accounting rate of return as an investing…

A: This question explains about  the advantages and disadvantages of using the accounting rate of…

Q: Apply the procedure to find the true IRR, or return on invested capital, of the mixed investment?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: A borrower who takes out a loan usually has better information about the potential returns and risks…

A: Effective risk management strategies and mechanisms, such as thorough due diligence and monitoring,…

Q: The following are investment criteria: net present value, payback, profitability index, average…

A: The question is based on the concept of capital budgeting techniques , to ascertain the true worth…

Q: This method evaluates the return of an investment by dividing the annual average income by the…

A: By dividing the annual average income by the average investment, return on investment is calculated.…

Q: The payback method measures: The profitability of an investment. The net cash inflow from an…

A: Pay back period is most popular method of capital budgeting decisions and is quite simple to use and…

Q: nt is more​ liquid, the return you receive will

A: Liquid investments are those investments that can be easily sold for cash.

Q: Another name for the expected value of an investment would be: a. The mean value b. The risk-free…

A: The expected value (EV) is an anticipated value for investment at some point in the future. In…

Q: The finance function is primarily interested in the relationship between the risks of investments…

A: As per the guidelines, only one question is allowed to be solved. please resubmit the question…

Q: What are quantitative measurements versus non-quantitative measurements with respect to risk?

A: Risk is used to describe the probability or uncertainty related to a future event with a favorable…

Q: Demonstrate the link between net present value and internal rate of return and how they may be used…

A: According to the question, the relationship between net present value and internal rate of return

Q: True or false. to apply the rate of return analysis correctly, we need to classify an investment i…

A: In the given question we need to answer whether the given statement is True or False.

Q: why net present value is considered to be superior to internal rate of return as an investment…

A: Investment- The purchase of an asset in order to generate income or capital gain is referred to as…

Q: 16. helps the investor to determine the suitable types of investments. A. Risk taker B. Risk adverse…

A: Risk of an investment asset is the fluctuation possible on the return. The riskier the asset, higher…

Q: Explain what is meant by Accounting Rate of Return (ARR) and Net Present Value (NPV) in the context…

A: Solution:- Accounting Rate of Return (ARR):- It measures the expected profitability from any capital…

Q: While comparing investment returns is an important starting point in evaluating investment…

A: Following are the steps involved in the performance analysis of investments:Identification of the…

Q: A particular investment's rate of return is referred to as a "return on investment.

A: In response to the question The phrase "financial market" refers to items that are often seen in the…

Q: In conducting a sensitivity analysis, the only parameter that represents a measure of worth is:a.…

A: Sensitivity analysis A financial model which helps in determining how the target variables get…

Q: weight

A: a) The expected rate of return for Brad is: Expected return = Σ (Return × Probability) = (-0.03 ×…

Q: omparing Value at Risk (VAR) and Expected Shortfall (ES), which is preferred by regulators for…

A: VAR that is value at risk and another is ES expected shortfall these are two methods to measure the…

Q: Discuss how the Accounting Rate of Return as an investment appraisal method is better than the Net…

A: Accounting ROR or ARR and Net Present Value(NPV) are tools that are used to make selection among…

Q: if diversification is desired, would you seek investments with high correlation?

A: The question is based on the concept of risk in investment and diversification effect. The risk…

Q: The  payback period is more preferable and the most  accurate investment criteria that could be used…

A: The time it will take for a business to recover an investment is known as the payback period. Think…

Q: How do you measure an investor's risk aversion?

A: The objective of this question is to understand how to measure an investor's risk aversion. Risk…

Q: What role does the correlation what role does the correlation of two assets play in computation of…

A: The answer and the explanation can be seen below:

Q: What are the multiplier ways to calculate the cost of equity? Why are there multiply ways to…

A: There are multiple ways to calculate the cost of equity. We have to talk about them and see if they…

Q: Discuss the pros and cons of the accounting rate of return as an investment criterion.

A: Definition: Average rate of return method: The average rate of return is the amount of income that…

Q: What are the limitations/problems from classifying performance using raw returns? and, What are the…

A: Limitations of classifying performance using raw returns: Raw data may be incomplete and may not…

Q: Identify two disadvantages of using the payback period for comparing investments.

A:

Q: Explain the three different ways in which the relationship between risk and required rate of return…

A: In the finance scenario, the relationship between risk and the required rate of return of an…

Q: Compare and contrast systematic and unsystematic risk and how it affects a portfolio.

A: Risk in a portfolio refers to the likelihood of losing money or not achieving the desired returns on…

Q: Whenever you make an investment decision, you need to consider its impacts on the diversification of…

A: Investment decision and diversification go hand in hand. One should be careful while making an…

Q: The expected value of an investment: Answer a. Is what the owner will receive when the investment is…

A: Expected Return refers to return anticipated by an investor while making investment. It may differ…

Q: How does the application of the standard deviation differ from the application of the coefficient of…

A: a. Standard Deviation: The average fluctuation of a variable around the mean is known as standard…