Explain the risk–return relationship, Financial Management

Assignment Help:

Explain the risk–return relationship

The relationship among the risk and required rate of return is termed as the risk–return relationship.  It is a positive relationship since the more risk assumed, the higher the needed rate of return most people will demand.

Risk aversion describes the positive risk–return relationship.  It describes why risky junk bonds carry a higher market interest rate as compared to essentially risk-free U.S. Treasury bonds.


Related Discussions:- Explain the risk–return relationship

#titApplicability of an operating cycle, Discuss the applicability of an op...

Discuss the applicability of an operating cycle in cabbage growing business in Uganda.

Explain the term - yield to call, Illustrate the process of calculating cal...

Illustrate the process of calculating call/ put options yields Issuing corporation will use provision if interest rates fall substantially below coupon rates offered on the se

Yield curve shift, The relative change in the yield for each treasury...

The relative change in the yield for each treasury maturity is known as a shift in the yield curve. When the change in the yield for all the maturities is same, t

Tax-backed debt obligations, Tax-backed debt obligations are the debt...

Tax-backed debt obligations are the debt instruments issued by counties, states, cities, towns, special districts and school districts. These are secured by some

Qualification criteria for a bidder of contract, Q ualification criteria ...

Q ualification criteria We discussed how to prepare the bid documents. Let us now see what criteria should be considered to qualify a bidder. You will have to open bidding

List the benefits of the flexible exchange rate regime, List the benefits o...

List the benefits of the flexible exchange rate regime. Answer:  The benefits of the flexible exchange rate system include: a) Automatic attainment of balance of payments eq

Determine the name of some profit margin ratios, Determine the name of some...

Determine the name of some profit margin ratios Other profit margin ratios can also be computed: Gross profit/ turnover Profit after tax/ turnover Advertising co

Determining the call option value, The effective maturity of a ...

The effective maturity of a callable bond can be anywhere between the first call date and its maturity date due to the presence of the call feat

Analysis of financial statements, Turnover has increased 10% since 2009 eve...

Turnover has increased 10% since 2009 even if this is at the expense of a drop in the gross margin earned which has fallen from 35.0% to 32.7% which has resulted in only a marginal

Fiancial management, Ashok is to receive an amount of Rs. 15,00,000 from hi...

Ashok is to receive an amount of Rs. 15,00,000 from his relative after 3 years. He wants to buy a house for which he wants the money to be paid now. His relative had al

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd