explain the unique characteristics of the asset class, their associated risks and potential returns. For each asset class, you should use one or two examples to support your explanation. Asset Class           Characteristics Risk Potential Returns Example Cash Products  Fixed Income  Equities  Currencies

Q: Define each of the following terms:g. Market Value Added; Economic Value Added

A: We can define the terms as follows:

Q: Which capital investment methods require the use of a present value table?

A: Net Present Value: It is a measure of profitability for a project used primarily in capital…

Q: Define Efficient Markets Hypothesis (EMH

A: EMH states that prices of the securities (like stocks) reflect all the available info and data. The…

Q: Define the terms, or give short explanations.       -dollar return -equilibrium -financial…

A: 1. Dollar return is the real profit or loss an investment makes over a specific time period, given…

Q: The following are investment criteria: net present value, payback, profitability index, average…

A: The question is based on the concept of capital budgeting techniques , to ascertain the true worth…

Q: Give a definition of a "return". Why do we need to incorporate risk into return (discount rate)?

A: Investment: An investment is when money is used now with the goal of increasing its value later. In…

Q: Which balance sheet might be most useful to an investor? a. U.S. GAAP balance sheet b. IFRS GAAP…

A: IFRS is principal based.

Q: The Capital Asset Pricing Model (CAPM) asserts that an asset’s expected return is equal to the…

A: Based on CAPM, Expected return on security = Risk free rate + Beta * Market risk premium

Q: Define the terms, or give short explanations.         -percentage return -price discovery…

A: Risk and return are two essential concepts in finance that are closely related to each other. In…

Q: how the cost of capital serves as a screening tool when dealing with the net present value method…

A: Answer with explanation are as follows. cost of capital - cost of capital is a expected rate of…

Q: Describe the capital asset pricing model and explain the role of beta as a risk measurement tool.

A: Answer

Q: What are some possible financial decisions in which using the Present Value (PV) formula might be…

A: The present value (PV) is the current value provided a defined rate of return of a future amount of…

Q: ExplainValuing REITs as Investments?

A: Valuing REITs as investments: A typical way for the calculation of REIT is to find the Net asset…

Q: Explain the assumptions of Capital Asset Pricing Model

A: It is providing the relationship between the expected rate of return and the systematic risk of the…

Q: Define Liquidity Analysis?

A: Liquidity analysis is very essential as it shows the ability of the firm in paying short-term bills.…

Q: why is Capital Asset Pricing Model relevant

A: The Capital Asset Pricing Model, popularly known as CAPM, is an important model that is often used…

Q: lain the relationship between return on equity (ROE), return on asset (ROA), and leverage effect.…

A: Return on equity and return on assets shows how much is the profit earned by the company and are…

Q: weight

A: a) The expected rate of return for Brad is: Expected return = Σ (Return × Probability) = (-0.03 ×…

Q: Discuss the main assumptions of the Capital Asset Pricing Model (CAPM).

A: The Capital Asset Pricing Model (CAPM) is a widely used financial model that calculates the expected…

Q: Basic Elements of Risk-Adjusted Returns?

A: Introduction: Risk adjusted return is a methodology for calculating and evaluating the returns on an…

Q: Define reinvestment rate risk

A: Reinvestment means investing without withdrawing the benefits (or) interest from the fund so that it…

Q: How do you turn an income statement int a forecasted return? And how is it helpful?

A: Return means earn additional on invested amount. Return is a positive factor in every investment.…

Q: What role does the correlation what role does the correlation of two assets play in computation of…

A: The answer and the explanation can be seen below:

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.