when considering the Basic Ideas of Finance, what is the main risk of buying or borrowing capital to invest in an asset?

Q: What is the vocabulary word for money that's in financial markets, and a rate of return for a…

A: The vocabulary word is the term for things generally used in the Financial market.

Q: What distinguishes a capital investment from other investments?

A: Investments: It is the method by which an investor increases his value over some time for future…

Q: What is the purpose of valuation in terms of financ

A: Introduction : In simple words, finance refers to gathering of money by one entity or individual…

Q: What factors affect the interest rate used to discount the cash flow expected from a financial asset

A: the interest rate that is used to discount the cashflow expected from a financial asset is nothing…

Q: What basic principle of finance can be applied to thevaluation of any investment asset?

A: Investor invests in any investment to earn the returns from it. As per the risk and return analysis,…

Q: What are the benefits and corresponding risks of Financial Investment?

A: Financial Investments are investments that are made with the expectation to receive future financial…

Q: What approach banks may take to determine adequate capital?

A: For a bank it is highly important to ensure capital adequacy. Capital adequacy leads to stability of…

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 is financial risk, and how does it arise?

A: Answer: Usually, financial risk refers to a situation where a company is not able to pay its fixed…

Q: when considering the Basic Ideas of Finance, what are the purposes and uses of assets?

A: Assets: Assets represent a resource having economic value owned by an entity, person, company, etc.…

Q: Explain the Principle of Investing in Financial Assets?

A: Securities are the financial assets that are traded in the financial or secondary or securities…

Q: What is the Principle of Investing in Financial Assets?

A: A financial asset is a liquid asset that gets its value from an authoritative right or guarantee to…

Q: What is the compensation for price risk in finance? How do they arise and what issues arise due to…

A: Price risk: Price risk can be defined as the risk that price of a security may reduce. This risk is…

Q: How do investors account for risk when determining an asset’s value?

A: Asset valuation helps to determine the fair value of the asset. Various asset valuation models such…

Q: How do you evaluate an asset whose value is dependent on future cash flow expectations

A: The Answer :

Q: On what does the interest paid on a cash investment depend?

A: Cash investment An investment (short-term) under which one makes a deposit the cash and also…

Q: What are the advantages and disadvantages of financing assets through loans

A: Resource account is that the act of utilizing Associate in Nursing organization's financial record…

Q: Discuss the different types of risk that an investor may face when undertaking investment in…

A: Risk is the chance of not getting the amount or kind of return which an investor is expecting from…

Q: What makes current liabilities different from long term liabilities?

A: Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Describe the Principle of Investing in Financial Assets?

A: The financial assets are those assets which are not having a physical existence like stocks, fixed…

Q: Suppose that we can describe the world using two states and that two assets are available, asset K…

A: The rate of return on an investment with no default risk is referred to as the "risk-free rate."…

Q: Explain the significance of time value of money in financial valuation?

A: Time value of money means the value of a sum of money in future is not the same as the value of…

Q: What is financial asset market?

A: Financial assets generally include bonds, stocks, mutual funds, cash, deposits with bank etc. These…

Q: Why valuation is so important in finance?

A: Finance is a very vast term which is mainly used for managing the money. The main functions of…

Q: How does the capital asset pricing model (CAPM) influence financial decisions regarding risk and…

A: CAPM is related to the connection between the securities and their expected returns. CAPM is…

Q: How do unequal cash flows affect the future value of an investment?

A: Unequal cash flows, meaning that the amounts of money received or invested at different points in…

Q: What is the actual cost of capital to the borrower?

A: The cost of capital to the borrower is the weighted average cost of capital from all sources of…

Q: what is the difference between investing and financing activities?

A: Cash flow statement include cash flows resulting from operating activities, investing activities and…

Q: how do banks improve asset utilisation to increase Return on Equity and what are the risk…

A: Banks are the financial institutions which deposit money from customers at lower interest rates and…