which investment is preferable?

Q: Differentiate between unacceptable investment alternatives and potentially acceptable ones?

A: An unacceptable investment refers to a financial asset or opportunity that carries significant risks…

Q: What is an econymic in development?

A: Economic Development is the growth of a country’s economy. It is the growth in the standards of…

Q: Which is better from the investor's perspective

A: The Answer

Q: Is the project viable or not? Suggest reasons

A: The viability of a project is examined in a feasibility study to ascertain the likelihood of…

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: Are there sources of value in an investment? what they are? and give an example for both?

A: Yes, there are various sources of value in an investment. An investment is a stock or a bond. People…

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: 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 is the initial cost of setting up the "stop-loss"  strategy?

A: The Stop-loss strategy is very useful which helps the investors to protect in the market, as the…

Q: What is investment decision making process ? And example

A: An investment decision refers to how a company's finances are to be invested in various assets in…

Q: What is the y risk-free investment?

A: Risk-free rate of return is the rate of return that an investor expects from an investment in any…

Q: Define the term Trade-Off between Risk and Reward?

A: Risk-Reward trade off refers to an investment principle which indicates higher the risk, higher is…

Q: How behavorial bias affect investment behavior?

A: Behavioral bias is the belief by the investors that unknowingly affects the investors investment…

Q: Explain the investment pool?

A: Investment Pool: Investment Pool is the joint funds that is planned financial arrangements for a…

Q: What is offer price?

A: Bid price is the maximum price which the buyer is willing to pay to purchase. In other words, it…

Q: What is an opportunity cost and why should it be included when making decisions?

A: Opportunity costs is the costs of next best alternative foregone by accepting current alternative.…

Q: What is the potentially acceptable investment alternative?

A: An alternative investment is a financial asset that doesn't can be categorized as one of the…

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: Which are the benefits of diversification?

A: The question is based on the concept of diversification. Diversification is a technique to spread…

Q: Compare the mutually exclusive alternatives based on the rate of return?

A: Mutually exclusive projects are the projects out of which one best project is selected due to lack…

Q: What is the fair value option?

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: Describe the Investment-Pool Concept?

A: Investment pools are institutional elements that are pooled speculation structures, with the…

Q: Explain the term Value investing strategies?

A: SOLUTION:-   Benjamin Graham, an American economist, investor, and professor, pioneered a new method…

Q: What is option value (of project)?

A: Option value of the project is the real option approach of evaluating projects that views selecting…

Q: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…

Q: What is the relationship of risk to the investment?

A: There is a direct relationship between risk and return in investment decision making. It means…

Q: payback period, NPV, and IRR always lead to the same decision? Why or why not? If not, which one…

A: Step 1   One of the most essential choices a business owner or management will ever make is capital…

Q: When does a project deny the merit consideration?

A: Project is assessed on the basis of various important considerations such as profitability, social…

Q: What is the conventional-payback method?

A: Conventional Payback Method

Q: How can I calculate the NPV of an investment?

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…

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.