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.
What happens if the payback period is within the acceptable range?
The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the expense or initial investment of a venture, or to what extent it takes.
Record and reserve chiefs utilize the restitution time frame to choose if speculation is to experience. Shorter paybacks mean increasingly appealing speculations while there is a less attractive quality for longer restitution periods.
Step by step
Solved in 3 steps
