The non-diversifiable risk and ways to measure it
Explain in brief the non-diversifiable risk and ways to measure it?
Expert
Unless the returns of one-half of the assets in the portfolio are exactly negatively correlated with the other half of the assets which is almost impossible because some risk will be there even after assets are combined into a portfolio. The risk degree that cannot be removed by diversifying from the portfolio's total risk is known as non-diversifiable risk. Non-diversifiable risk is calculated using a term called beta. The ultimate grouping of diversified assets, the market has a 1.0 beta. The individual assets and betas of portfolios have the returns related to those of the overall stock market. a) Portfolios having beta values with higher than 1.0 are comparatively more risky than the market. b) Portfolios with betas less than 1.0 are relatively less risky than the market. c) Risk-free portfolios have a beta of zero.
Explain boundary/final conditions in Monte Carlo method.
Explain in detail stock dividends and stock splits affect the common stock’s market price. Also explain why a firm declares stock dividends and stock splits?
Explain probabilities and statistics for quantifying risk in finance.
Explain the term number of dimensions in finite-difference methods.
Financing costs included into the capital budgeting analysis process. Explain.
What is actuarial approach in Central Limit Theorem?
Find out expected return at last asset when return on the index and slandered devotion is given?
Explain the experiment of Oldrich Vasicek of short-term interest rate.
What is Hedge?
What is Rho for the foreign exchange option value?
18,76,764
1922694 Asked
3,689
Active Tutors
1422013
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!