MRPL - Analyzing Risk and Return Submitted By- Sumer Lal Meena Exe-PGP 2007-09 � BACKGROUND READING THE CAPITAL ASSET PRICING MODEL (CAPM) Some‚ but not all‚ of the risk associated with a risky investment can be eliminated by diversification. The reason is that unsystematic risks‚ which are unique to individual assets‚ tend to wash out in a large portfolio‚ but systematic risks‚ which affect all of the assets in a portfolio to some extent‚ do not. Because unsystematic risk can be freely eliminated
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systematic risk of the volatility of an asset relative to the market volatility. J.Choi & M.Richardson (n.d) stated that the asset volatility is time-varying and that financial leverage matters and has a large influence on equity volatility. Besides that‚ the systematic risk is defined as the probability that the financial system as a whole might become unstable‚ rather that the health of individual market participants (E.V.Murphy‚ 2012). Sometimes‚ systematic risk is called as market risk. According
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key documents (L/C Letter of Credit ‚ Bill of lading ‚ Draft) constitute a system developed and modified over centuries to protect both importer and exporter from the risk of noncompletion and foreign exchange risk as well as to provide means of financing. Protect against risk of noncompletion Protect against forign exchange risk Finance the trade Key doctuments
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IMPACT OF LIQUIDITY RISK ON PERFORMANCE Abstract Liquidity risk arises when there is discrepancy between the demand of borrowers and the inabilities to meet these demands. Purpose The purpose of this paper is to analyse the liquidity risk and the impact of liquidity risk on performance of the manufacturing sector. Methodology Least square regression model is used in this study. Data of manufacturing sector is used to achieve the objective of this research paper. ROA and EPS are used as measures
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1520-5509 Clarion University of Pennsylvania‚ Clarion‚ Pennsylvania THE IMPACT OF EXTERNAL DEBT ON ECONOMIC GROWTH: A COMPARATIVE STUDY OF NIGERIA AND SOUTH AFRICA Folorunso S. Ayadi University of Lagos Felix O. Ayadi Texas Southern University Abstract This paper investigates the impact of the huge external debt‚ with its servicing requirements‚ on economic growth of the Nigerian and South African economies. The external debts of Nigeria and South Africa are analyzed in a new context utilizing traditional
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CHAPTER 5: INTRODUCTION TO RISK‚ RETURN‚ AND THE HISTORICAL RECORD PROBLEM SETS 1. The Fisher equation predicts that the nominal rate will equal the equilibrium real rate plus the expected inflation rate. Hence‚ if the inflation rate increases from 3% to 5% while there is no change in the real rate‚ then the nominal rate will increase by 2%. On the other hand‚ it is possible that an increase in the expected inflation rate would be accompanied by a change in the real rate of interest. While
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government in the country’s own currency is often considered "risk free". However‚ risks can be more suffered when it comes to foreign national debt Firstly‚ ‚ the market interest rate tends to be unstable and different for debts of different countries‚ which is a practical problem to both the debt in the country’s own currency and the foreign purchasers. Secondly‚ policies in the other countries can be unstable which can be anything but risk-free to the foreign purchasers. Examples of this phenomenon
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North-Holland Common risk factors in the returns stocks and bonds* Eugene F. Fama and Kenneth on R. French Unirrrsit.v 01 Chicayo. Chiccup. I .L 60637‚ C;S;L Received July 1992. final version received September 1992 This paper identities five common risk factors in the returns on stocks and bonds. There are three stock-market factors: an overall market factor and factors related to firm size and book-to-market equity. There are two bond-market factors. related to maturity and default risks. Stock returns
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Introduction According to The Environment Agency in the United Kingdom (2006)‚ Environmental Accounting can be defined as: “The collection‚ analysis and assessment of environmental and financial performance data obtained from business management information systems‚ environmental management and financial accounting systems. The taking of corrective management action to reduce environmental impacts and costs plus‚ where appropriate‚ the external reporting of the environmental and financial benefits
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Debt and equity financing Debt and equity financing is the sources of funding can provide you with all the cash you need to start or grow your business. Debt financing Debt financing means borrowing money from an outside source with the promise of paying back the borrowed amount‚ plus the agreed-upon interest‚ at a later date. When a firm raises money for working capital or capital expenditures by selling bonds‚ bills‚ or notes to individual and/or institutional investors can be considered as debt
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