How the capm assists in measuring both risk and return

Assignment Help Risk Management

Reference no: EM131548023

Part -1:

Analyze the Capital Asset Pricing Model (CAPM). Using the course text and an article from ProQuest as references, address the following:

Explain how the CAPM assists in measuring both risk and return.

Explain how the CAPM assists in calculating the weighted average costs of capital (WACC) and its components.

Illustrate why some managers have difficulty applying the Capital Asset Pricing Model (CAPM) in financial decision making.

Identify the benefits and drawbacks of using the CAPM.

Develop a 200 - 300 word answer supporting your position.

Guided Response: Review several of your peers' postings and critique their analysis. Respond to at least two of your classmates by comparing the similarities and differences of your analysis. Why do you think the responses were either similar or different?

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Using the annual report from the company that you have selected for your Final Project, discuss the risks the company faces and the actions they take to mitigate those risks. Refer to the Management Discussion and Analysis section of the annual report for this information.

As part of your response consider whether you think the risk mitigation techniques are reasonable. Discuss what others concerns or advice you would offer if you had the opportunity.

Include in your post a calculation for the probability of one of the risks identified by your company. This information may not be available in the annual report, therefore you will likely need to conduct research and critical thinking to complete this calculation.

Tip: For help with reading an annual report access this handy guide from Money Chimp.

Develop a 200 - 300 word explanation supporting your position.

Guided Response: Review several of your classmates' postings. Consider how your classmates' companies identify and proposes risk mitigation techniques. Compare and contrast the risk mitigation techniques that your chosen company uses to the ones used in your classmates' posts.

Assignment

This video introduces the concept of business risk and risk management. It notes that business risks can generally be classified into four categories: property, market, employee, and customer.

Using each of the four categories of risk, develop an analysis of how financial management techniques or policies can be used to mitigate each of the risks. To supplement your risk analysis, you must use at least one article for each of your risk mitigation techniques or policies from the Ashford University Library database.

Summarize your findings in a three- to five-page paper (excluding the title and reference pages) that is formatted according to APA style as outlined in the Ashford Writing Center. Be sure to properly cite at least four scholarly sources using APA style.

Reference no: EM131548023

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