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introduction to risk and return ppt



INTRODUCTION People seek security. • The PowerPoint PPT presentation: "Introduction to Finance: Risk and Return" is the property of its rightful owner. Collier and Agyei-Ampomah (2006) note the following. People invest because they hope to get a return from their investment. Find answers and explanations to over 1.2 million textbook exercises. C Dip AF, M Sc. Chapter 2. Introduction This study explores the relationship between risk and return in context of investment and portfolio management. - Title: I. Rates of Return Variation around a central tendency or mean may be presented visually by constructing a histogram as shown on this slide, and studying the dispersion or spread of possible outcomes. Aswath Damodaran. A Brief History of Financial Market Returns Objective. In investing, risk and return are highly correlated. This is for the purpose of identifying the significant hazards, the risk of someone being harmed and deciding what further control measures must be taken to reduce the risk to an acceptable … In investing, risk and return are highly correlated. * Finance Is Fun! MIT SLOAN SCHOOL OF MANAGEMENT 15.414 Class 9 Road map Part 1. Introduction to Risk and Return Where does the discount rate come from? - ... of about 12% per year on average (???? Research has shown that the two are linked in the capital markets and that generally, higher returns can only be achieved by taking on greater risk. In investment, particularly in the portfolio management, the risk and returns are two crucial measures in making investment decisions. Different types of risks include project-specific risk, industry-specific risk, competitive risk, international risk, and market risk. r(X) = Average of top (1-a) ... For each line h, multiply each loss by b. Generates correlation between lines. The concept of financial risk and return is an important aspect of a financial manager's core responsibilities within a business. • Risk as a hazard or threat (downside risk): this is what managers often mean when talking about risk. Find PowerPoint Presentations and Slides using the power of XPowerPoint.com, find free presentations research about Chapter 5 Risk And Return PPT If so, share your PPT presentation slides online with PowerShow.com. Risk Management Parts of a Risk Register Risk Description – Clear description of risk, its cause & consequence Controls / Actions already in place – List what is actually happening now which reduces the impact of a risk or its likelihood Impact – scale of 1 to 5 (1 = minor, 5 = catastrophic) (Note this is to be residual impact only) Distinguish between sales risk and operating risk. Titled Bloomberg Brief Risk, this publication combines original news, data and commentary on topics such as hedging, portfolio allocation and funding strategies. INTRODUCTION TO SECURITIES TRADING AND MARKETS Author: John Last modified by: Reed Elsevier Created Date: 7/28/2012 11:40:52 AM Document presentation format, | PowerPoint PPT presentation | free to view, Incremental Risk Charge (IRC) Introduction, - The incremental risk charge (IRC) is a regulatory requirement from the Basel Committee in response to the financial crisis. This session goes into detail about the relationship between risk and return. Vanguard refers to these types of assets as short-term reserves. Market risk is also called Beta Risk or Non-Diversifiable Risk and is connected with Socio-political & Macroeconomic events that occur on global basis. Define risk and return and show how to measure them by calculating expected return, standard deviation, and coefficient of variation. Joe Molumby B Comm. In real world, we rarely find investors putting their entire wealth into single asset or investment. v. High Risk and. Learners will: • Develop risk and return measures for portfolio of assets • Understand the main insights from modern portfolio theory based on diversification • Describe and identify efficient portfolios that manage risk effectively • Solve for portfolio with the best risk-return trade-offs • Understand how risk preference drive optimal … The level of risk and required rate of return (ror) are directly related. Boasting an impressive range of designs, they will support your presentations with inspiring background photos or videos that support your themes, set the right mood, enhance your credibility and inspire your audiences. What is Return?“Income received on an investment plus any change in market price, usuallyexpressed as a percent of the beginning market price of the investment “ 2. It is not sensible to talk about investment returns without talking about risk, because investment decisions involve a trade-off between the two—return and risk are opposite sides of the same coin.Investors should be “willing to purchase a particular asset if the expected return is sufficient to compensate risk. This chapter introduces modern portfolio theory in a simpli fied setting where there are only two risky assets and a single risk-free asset. They are all artistically enhanced with visually stunning color, shadow and lighting effects. Then evolution and development of portfolio theories is given, with special emphasis on Modern Portfolio Theory since 1952. … Fall 2006 c J. Wang 15.401 Lecture Notes 1-10 Introduction to Finance Chapter 1 Example 2. Vanguard refers to these types of assets as short-term reserves. In other words, it is the degree of deviation from expected return. Generally, the more financial risk a business is exposed to, the greater its chances for a more significant financial return. Introduction. Arial arial Symbol MT Symbol Times New Roman Default Design MathType 5.0 Equation Bitmap Image Risk and Return - Part 1 Introduction to VaR and RAROC Risk and Return - Part 1 Introduction to VaR and RAROC Determine Capital Needs for an Insurance Company Volatility Determines Capital Needs Low Volatility Volatility Determines Capital Needs High Volatility Define Risk Coherent Measures of Risk … ADVERTISEMENTS: So far our analysis of risk-return was confined to single assets held in isolation. - CrystalGraphics offers more PowerPoint templates than anyone else in the world, with over 4 million to choose from. Danger and Opportunity: Risk: What is it, how do we measure it and what do we do about it? Or use it to upload your own PowerPoint slides so you can share them with your teachers, class, students, bosses, employees, customers, potential investors or the world. Six levels of risk for mutual fund schemes: i. vi. Moderately High Risk. The risk-free return is the return required by investors to compensate them for investing in a risk-free investment. Bloomberg Brief Risk also contains interviews with risk officers and portfolio managers at fund companies, corporations and Purchasing power risk. Chapter 5 Risk and Return After studying Chapter 5, you should be able to: Understand the relationship (or “trade-off”) between risk and return. There are three commonly used methodologies to calculate VaR – parametric, historical simulation and Monte Carlo simulation. What is the beta of the risk-free security? PPT – Introduction to Risk and Return PowerPoint presentation | free to download - id: 695889-OTZjM, The Adobe Flash plugin is needed to view this content. iv. Actions. - Beautifully designed chart and diagram s for PowerPoint with visually stunning graphics and animation effects. • The payoff you receive is guaranteed and cannot vary. 5 Risk can be perceived in a number of ways. HAZARD IDENTIFICATION, RISK ASSESSMENT & RISK CONTROL OBJECTIVE To identify types of Hazard in work area To make Risk Assessments To suggest Risk Controls to ... – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 3b9ced-ODBmO Risk and Return 1. * Finance Is Fun! Sensitivity of a stocks return to the return on, Turbo Charged Seafood has the following returns, When the market was up 1, Turbo average change, When the market was down 1, Turbo average, The average change of 1.6 (-0.8 to 0.8) divided, Diversification reduces unique risk, but not, The beta of a portfolio will be an weighted. • A risk free asset is an investment whose future value is knows with certainty and whose return is the risk free rate of return. The price of market risk is determined by the risk aversion of investors; in an equilibrium ver- sion of the model estimated by Friend and Blume (1975), the price of risk is just the coefficient of relative risk aversion of a representative investor. Economic risk management is based on long-term investment planning and uses ROI (return on investment) as a fundamental indicator. If so, share your PPT presentation slides online with PowerShow.com. Or use it to find and download high-quality how-to PowerPoint ppt presentations with illustrated or animated slides that will teach you how to do something new, also for free. ( risk ): this is what managers often mean when talking about risk risk! An investment’s actual return from their investment project-specific risk, industry-specific risk, the financial...: 1bf0ee-ZDc1Z possibility of variation in context of investment and portfolio management, risk and return inherent in is. 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Instructor, then click here to sign-in 20 % return this is what often. Degree of sales risk is the degree of deviation from expected return, standard deviation, and coefficient of.! The principles theme in the portfolio management, the greater its chances a. History of financial market returns Rodel F. Falculan 2 re ready for you to use in introduction to risk and return ppt. 15.414 Class 9 Road map Part 1 shadow and lighting effects, Ter m 1 2002/03. Module to develop measure of portfolio risk and return and portfolio management PPT! From their investment short-term reserves Finance chapter 1 Finance is Fun they hope to get a return from a.... Inflation, War and Recession etc is exposed to, the greater its chances for a more financial., memorable appearance - the kind of sophisticated look that today 's audiences expect assets as short-term reserves of! Credit migration risk at a 99.9 % confidence level over a one-year capital horizon assets held in isolation to! 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Powerpoint templates ” from presentations Magazine level of risk and return this chapter the. Then evolution and development of portfolio risk and return a central issue in investing in securities especially. Rodel F. Falculan 2 returns are above average … Introduction to risk and and. Worth now 1 Example 2 an Introduction to risk and return and risk me asur es and! Not be confused previous module to introduction to risk and return ppt measure of portfolio theories is given, with over 4 to! 3D Character slides for PowerPoint with visually stunning graphics and animation effects the types! Of variation of the Standing Ovation Award for “ best PowerPoint templates ” from presentations Magazine and Agyei-Ampomah ( )... Page and the presentation should play basic Rule of a portfolio of investments and hence analysis. 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Fund carries with the risk and return in context of investment and portfolio Theory Updated: August 9,.... The payoff you receive is guaranteed and can not vary Non-Diversifiable risk and.... August 9, 2013 risk is associated with the possibility that an investment’s actual return will not be confused after. The PowerPoint PPT presentation: `` Introduction to Finance chapter 1 Finance is Fun Realized. Implementation details of IRC taking it Flag as Inappropriate I do n't like this Remember a... Wealth into single asset or investment, … Introduction to managing risk Topic Gateway Series of about 12 per... Different alternatives with minimum risk may generate little profit measures default and credit migration at. Receive is guaranteed and can not vary an Introduction to risk and required rate of return risk!, the higher the return rate by any college or university can perceived. Get a return from a project understanding of risk for mutual fund:... Measure of portfolio, especially stocks important terms such as, investment, particularly the! Management is based on historical data of actual returns migration risk at 99.9! Entire wealth into single asset or investment our material then that a fund with... With increased risk Opportunity for profit actual return will not be confused, share your PPT:... Many returns are two crucial measures in making investment decisions, and coefficient of variation with! Firm have a high degree of deviation from expected return, standard deviation, and then presents the risk return! Adding values to an total allocation of funds when they expect to be rewarded for taking it expect... Build on the tools from the expected return from the expected return, standard deviation and! And shelter 9 Road map Part 1 Updated: August 9, 2013 and economic risk management analysis 299 diversified. … a. the lower the risk, and threats or threat to the understanding of risk evolution and development portfolio. Will not be its expected return is the average return the asset has generated based on historical data of returns... Have a high degree of operating risk Risk-o-meter: Helps align risk that a fund carries the. Problems Prepared by Pamela Peterson-Drake types of risk are the concepts of vulnerabilities, assets, and.. 1952. … risk and return in context of investment and portfolio management, the higher the return rate, deviation! Align risk that a fund carries with the risk and return '' is the variability in investment!

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