Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
a. Outline the three main forms of business organisation and critically discuss the benefits
and drawbacks associated with each.
b. Discuss and critically compare sensitivity analysis and scenario analysis as means of
estimating a project’s risk.
c. Clearly explain the difference between systematic risk and non-systematic risk and
discuss the relationship between beta and the expected rate of
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