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.
Explain Measures of Variance and Risk?
Variance tests normal or normal variability. Variability is volatility for investors, and volatility is a hazard indicator. The variance statistics will also assist to assess the hazard that an investor takes when protection is purchased.
A great variance shows that the numbers in the collection are anything but and far from the average although there is a minor variance. Differences can be harmful. A nil variance value says that all results are equal within a set of numbers. All variances which are not 0 are positive.
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