Is there any justification for an investor to invest in assets with a negative beta?

Q: How do an investment's required rate of return vary with perceived risk? Explain with an example?

A: Required rate of return refers to the rate which the investors expects from their investments. This…

Q: Is a method of screening out in certain situations an unacceptable investment alternative?

A: Capital budgeting is the technique that is used in business to determine the best investment…

Q: The capital asset pricing model (CAPM) contends that there is systematic and unsystematic risk for…

A: Introduction : In simple words, capital asset pricing model or CAPM can be understood as a valuation…

Q: What is the causes of the financial risk?

A: financial risk - financial risk is the possible danger of losing money from an investment made by…

Q: What are the real risks of an adverse financial outcome, especially in the short run?

A: Risk is the important factor of investment decisions to explain the capability of an investor to…

Q: sk is the potential for an investment to generate more than one return. A security that will produce…

A: While investment there are potential risk to the investment due to which return realized vary…

Q: Beta and CAPM Is it possible that a risky asset could have a beta of zero? Explain. Based on the…

A: Beta of a portfolio is the weighted average of the beta of individual asset and it measures the…

Q: Can the risk premium be negative after an investment is undertaken or before?

A: The risk premium is the extra risk-free return to require the risk of project acknowledgment. This…

Q: Why is it preferred to have assets with negatively correlated returns in a well-diversified…

A: Correlation means degree to which two variance move in coordination of each other.  Correlation is…

Q: what does it mean if the npv and irr are both negative quora, should the company invest in the…

A: Capital Budgeting entails long-term planning and monitoring of capital expenditures, as well as a…

Q: Why is the additional risk not taken without expected additional return?

A: The risk-return tradeoff takes note of that the potential return increments with an expansion in…

Q: Even if behavioral biases do not affect equilibrium asset prices, why might it still be important…

A: Answer: There exist two reasons why the behavioral biases do not impact equilibrium asset prices.…

Q: What kind of investment is considered to be risk-free?

A: A risk-free investment is an investment that has a minimum or no fluctuation from the expected…

Q: How can an investor eliminate Unsystematic Risk?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk. Systematic risk is non…

Q: Market risk ________.   a. is equal to the rate of return generated by a risk-free asset b.…

A: By simple diversification the total risk can be reduced but can not be totally eliminated. The…

Q: What are the weaknesses of capital market research?

A: Capital market is the market in which securities are traded. Primary market and secondary market are…

Q: How can an investor eliminate Systematic risk?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk

Q: By choosing assets that do not exhibit a high positive covariance with each other, the systematic…

A: Systematic risk is the risk associated with the market and is inherited to all securities in the…

Q: What does Jensen's alpha measure? a. An investor's reward in proportion to their assumption of…

A: Jensen's alpha is a single number that describes the predictive ability of a fund manager. The…

Q: When using the binomial model, you can't make decisions about investment using only the risk-neutral…

A: Risk-neutral probabilities are used to try to find an asset's or financial instrument's objective…

Q: any risk attached to a financial asset should not be considered when making an investment decision…

A: Financial asset A financial asset is referred to as a liquid asset that features stocks, bonds, bank…

Q: You are a risk-averse investor. Would you therefore invest in financial assets that have a high or a…

A: The risk-averse investors are those investors who prefer the lower return with lower risk instead of…

Q: Explore the implications of short-selling and the inclusion of a risk-free asse

A: Short selling may be a trading or investment strategy that bets on the worth of a stock or other…

Q: Doing nothing is a viable investment alternative. True or False?

A: Investments are the methods through which individuals and companies invest or park their money and…