Risk Analysis Methods – Meaning and Types
Risk Analysis Methods: Understanding the TermIn a business, there are different types of threats and risks. There are different reasons and factors that give… Read Article
Methods of Risk Measurement
Standalone Risk
Standalone Risk: MeaningWe can define “standalone risk” as the risk that an investor faces when he holds only one single asset as an investment.… Read Article
Decision Tree Analysis – Meaning, Example, Steps, and More
A Decision Tree is a graphical chart and tool to help people make better decisions. It is a risk analysis method. Basically, it is… Read Article
Can Covariance be Negative?
Covariance is a statistical tool for measuring the relationship between two random variables. It essentially indicates the direction between the two variables. It is… Read Article
Risk Adjusted Discount Rate – Meaning, Formula, Example and More
What is Risk-Adjusted Discount Rate?Risk-Adjusted Discount Rate (RADR) is sum total of two components. And these components are the risk-free rate and the risk… Read Article
Opposite of Risk Aversion
What is the Opposite of Risk Aversion?Risk aversion is an approach to making investments in safe and stable financial instruments, even though if they… Read Article
Multiple Discriminant Analysis
To better understand Multiple Discriminant Analysis, let’s first understand Discriminant Analysis. So, Discriminant Analysis is a regression technique that we use in statistics to… Read Article
Treynor Ratio – Meaning, Formula, Importance and More
What is a Treynor Ratio?The Treynor Ratio concept was developed by Jack Treynor, an American economist who was known as a scholar of Investment… Read Article
Expected Return
Meaning of Expected returnThe expected return of an investment is the expected return an investor will get from an investment or a portfolio of… Read Article
Coefficient of Variation
Meaning of the Coefficient of VariationCoefficient of Variation (CV) is a statistical measure that helps to measure the relative variability of a given data… Read Article
Certainty Equivalent – Meaning, Importance and More
Certainty Equivalent is the return or cash that an investor will accept today than the higher but uncertain return in the future. Or, we… Read Article