Chapter 7

Stock Market Risk and Performance

Facilitator: DERO Juan Pablo Salas del Río

Honestidad Integridad Equidad Verdad Libertad Respeto a la Vida

Respeto a la Naturaleza Paz Justicia Comportamiento Ético Solidaridad

Risk
Measurement of the uncertainty about the Return that an Investment
will earn or, in a more formal sense, is the Degree of Variation of the
Income related to a Specific Asset.

Chapter 7
Honestidad Stock Market Risk and Performance
Performance
Profit experienced by an Investment in a Specific Period.

Chapter 7
Integridad Stock Market Risk and Performance
2 Types of Investments
Investment in 1 single Financial Instrument
Portfolio Investment

Chapter 7
Comportamiento Ético Stock Market Risk and Performance
Investment in 1 single Financial Instrument
It is the type of investment that occurs when only 1 Financial
Instrument is invested.

Example: The Investor Invests in Real Estate (Fibers), but is not

interested in Investing in the Purchase of Shares in a Stock Exchange.

Chapter 7
Equidad Stock Market Risk and Performance
Portfolio Investment
It is the type of investment that is given when only 1 instrument is
invested. It is the type of investment that is given when it is invested
in at least 2 financial instruments.

Example: The Investor Invests in Real Estate (Fibers), and also Invests
in the Purchase of Shares in a Stock Exchange, and perhaps, also
Invests in opening a Savings Account.

Chapter 7
Verdad Stock Market Risk and Performance
Risk Evaluation
It is an Analysis of the Possibilities of Success or Failure to Invest in a
Financial Instrument.

Chapter 7
Libertad Stock Market Risk and Performance
Risk Assessment Methods
Sensitivity Analysis
Probability Analysis
Scenario Analysis
Decision Trees
Simulation

Chapter 7
Respeto a la Naturaleza Stock Market Risk and Performance
Sensitivity Analysis
Risk Assessment Method that uses several possible Performance
Calculations to obtain a Perception of the Degree of Variation
between the Results.

Chapter 7
Paz Stock Market Risk and Performance
Probability Analysis
Risk Assessment Method that uses several possible Performance
Calculations to obtain the Possibility of a given Result.

Chapter 7
Justicia Stock Market Risk and Performance
Scenario Analysis
Risk Assessment Method that evaluates the Impact on the Company's
Performance of Simultaneous Changes in various Variables.

Chapter 7
Verdad Stock Market Risk and Performance
Decision Trees
Risk Assessment Method that uses Diagrams to map the various
Investment and Performance Decision Alternatives.

Chapter 7
Comportamiento Ético Stock Market Risk and Performance
Simulation
Risk Assessment Method based on Statistics and applying
predetermined Probability Distributions and Random Numbers to
calculate Risky Results.

Chapter 7
Libertad Stock Market Risk and Performance
… We continue with Theoretical Evidence, Practical Evidence or Video …!

Chapter 7
Libertad Stock Market Risk and Performance