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"In finance, risk is best judged in a portfolio context." Is this true? Why?
Finance & Accounting
Pages 5 (1255 words)
“In finance, risk is best judged in a portfolio context." Is this true? Why? Introduction Investment in national as well as globally is a very common strategy in today’s business world. In terms of finance, investment in global environment is called international diversification…
in the capital as well as money market in different countries. The whole process is done by the finance manager of the concerned investing companies. The need for the investment market globally generated from the very advent of the securities market and the developments in the line of market participation in the stock exchanges and hence market volumes. These had a cumulative impact on the volatility in the securities market which ultimately gave rise to the need of the technical analysis tool in the hands of the experts to crack the investment market movements (Correia, 2007, p.154). The need for the understanding of the market trends came primary to the fundamental analysis of the companies and this gave rise to the need for qualified and expert personnel to act as investment bankers in the hands of large asset management companies and investment banking sector. Here this study is based on different types of tools and techniques of investment management like risk and return, CAPM model, WACC Model, capital structure, option etc. Risk and Return The terminology “risk” is mainly used for the investment which indicates the difference between the actual return and the expected return of the investment (Kieso, 2010, p.97). On the other side, return on the investment indicates the earring from investment which can be treated as a reward of risk bearing. ...
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