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

Investment objectives, Investment Objectives: Any investment should alw...

Investment Objectives: Any investment should always start with identifying its objective. Thus, the first step in the pension fund investment management system is defining the

Determine about the strategic benchmarking, Determine about the Strategic B...

Determine about the Strategic Benchmarking Comparison in terms of an organisations 'strategic choices' made to the most successful market leader for example review organisat

Financial statement, Telephone service costs the Eggleston Motor Hotel $250...

Telephone service costs the Eggleston Motor Hotel $250 per week. The business pays its phone service bill on the fifteenth day of each month, but it prepares its financial statemen

Dry up of liquidity and increased correlation, Hedge funds are short two ty...

Hedge funds are short two types of funding options. Describe in detail what these options are. Describe why these options become more valuable during a financial crisis. During

No title, discuss the steps in the controlling process

discuss the steps in the controlling process

Modern approach, Meaning merits nd demerits of modern approch of financial ...

Meaning merits nd demerits of modern approch of financial management

Institutional clearing member, Institutional Clearing Member (ICM) A Fi...

Institutional Clearing Member (ICM) A Financial Institution has to subscribe to at least 100 equity shares of Rs.10,000 each to become an Institutional Clearing Member of COFEI

Enumerate about the turnkey operations, Enumerate about the Turnkey operati...

Enumerate about the Turnkey operations An illustration of a turnkey business would be a franchise for example immediate brand, systems and product with exclusive territory. A t

Define the term shareholders, Shareholders Shareholders are usually ass...

Shareholders Shareholders are usually assumed to be interested in wealth maximisation. This though involves consideration of potential return and risk. Where a company is liste

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