Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Download
Standard view
Full view
of .
Look up keyword
Like this
6Activity
0 of .
Results for:
No results containing your search query
P. 1
Chapter 5 Understanding Risk

Chapter 5 Understanding Risk

Ratings: (0)|Views: 175|Likes:
Published by Jean Pierre Naaman
This ppt slide summarizes chapter 5 in the course "Money, Banking & the financial markets "
The chapter is called "Understanding Risk"

Download the powerpoint because some of the slides are not appearing correctly while seen online
This ppt slide summarizes chapter 5 in the course "Money, Banking & the financial markets "
The chapter is called "Understanding Risk"

Download the powerpoint because some of the slides are not appearing correctly while seen online

More info:

Categories:Types, Business/Law
Published by: Jean Pierre Naaman on May 12, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PPTX, PDF, TXT or read online from Scribd
See more
See less

12/12/2012

pdf

text

original

 
CHAPTER 5
Understanding Risk 
 
Defining Risk
 Risk is a measure of uncertainty about the possible future pay offs of an investment. It ismeasured over some time horizon, relative to abenchmark.
•Risk is a measure that can be quantified.Uncertainties that are not quantifiable cannot bepriced.
Understanding Risk
 
Risk arises from uncertainty about the future.
Risk has to do with the future payoff of an investment, which is unknown. Imagining all the possible payoffsand the likelihood of each one is a difficult butindispensable part of computing risk.
The definition of risk refers to an investment or group of investments.
Risk must be measured over some time horizon. Inmost cases the risk of holding an investment over ashort period of time is smaller than holding it over along one.
Risk must be measured relative to a benchmark ratherthan in isolation.
Understanding Risk

Activity (6)

You've already reviewed this. Edit your review.
1 hundred reads
Nhoc Tì liked this
Sachin Kumar liked this
divi9 liked this
mjespinosa liked this
Nilay Jinturkar liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->