We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Investment Risks - Essay Example

Comments (0)
Summary
The principle is that higher the risk, higher the return shall be provided to the investors. Based on this principle, the above graph…
Download full paper
GRAB THE BEST PAPER
Investment Risks
Read TextPreview

Extract of sample
Investment Risks

Download file to see previous pages... It is also important to note that the relative degree of risk against the return does not need to be in linear relation i.e. it is not necessary that the risk and return increase in same proportion however, if risk increases, it is necessary that the return must increase too in order to compensate the investors for taking increased risk. (Ante, 2009). The above graph therefore indicates that the investment four has the highest risk and highest return whereas investment 1 has the lowest risk and lowest return. This graph also indicate that the investors may be preferring different combinations of the investments i.e. the investment that is providing lowest returns may be made in the government treasury securities whereas investment providing highest returns may made in the stocks of a corporate as the stocks provide highest returns and also carry greatest risk among all instruments of investment.
It is important to understand that the expected return is always calculated by multiplying the return with the probability and the resulting figure is called the expected return on any investment. Therefore the investment that provides highest expected return shall be chosen over other investment. The investor should choose an investment that pays a guaranteed return of 7% because given the overall probability of different returns, the investors will get the expected return of 5% with a probability of 0.5 whereas the investment providing 7% result has the probability of 1 that means the expected return will be 7% which is highest as compared to other investment. The higher the probability greater are the chances that the return will be guaranteed therefore an investment with a lower probability will yield lower expected returns whereas an investment with higher probability of getting the same return will yield higher expected returns. Therefore in this case, since the probability of getting 7% return is ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The various potential opportunities for investment in the international marketplace
The study intends to provide a brief understanding of the various potential opportunities for investment in the international marketplace. Foreign market investment has become a favorable option for investment in recent times. However, there are certain risks and mediums for foreign market investment that are required to be followed in order to proceed successfully towards fulfilling the desired objectives of investment.
3 Pages(750 words)Essay
Investment analysis
When it comes to product innovation, no business is far behind. Even the financial markets have been a domain of product innovations in the recent past. One such innovation in the highly lucrative financial markets is The Hedge Funds. Hedge Fund refers to “an aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).” (Investopedia, 2011) The nature of Hedge Fund is different from many other investment setups.
8 Pages(2000 words)Essay
Investments in Emerging Countries

The author states that investments in Russia is facing sharp fall for the past few months. Higher global crude oil price is expected to benefit Russia’s economic recovery. But this benefit will be carried away by the expected capital outflows. The capital outflow of Russia is much higher compared to that of the inflow.

1 Pages(250 words)Essay
Investment
The paper begins by providing an overview on the various investment types and afterwards concentrates on evaluating which one is a better investment vehicle by weighing their advantages and disadvantages with respect to their various tax implications.
13 Pages(3250 words)Essay
Investment Risks
Investment risk refers to the probability and likelihood that the investments made by individuals as well as corporate investors do not provide the required returns that were calculated before the decision for the investment was made. There may be a number of investment risks that directly or indirectly affect investments.
10 Pages(2500 words)Essay
Market Risks
However, recently the firm was charged for litigation and their co-founder was arrested. These risks are very common in emerging markets as government has little control of so-called "Big Businesses". (New York Tmes, 2009). Not only this, loss of investment is another major risk in these markets due to their volatility and their dependence on other economies of the world.
2 Pages(500 words)Essay
StockTrak Investment Strategy
The portfolio selection is made of six stocks namely Google (GOOG), AT&T, TSL, BAC, and Tesla (TSLA). In addition, a corporate bond of Time Warner Cable Corporation has been selected in the portfolio and five years United States
2 Pages(500 words)Essay
Investment Report
1. As a pure investor, my duty is to balance off the risks and benefits associated with any type of stock purchased. Based on the Portfolio Theory, it is clear that the combination of assets that are not closely tied in terms of
4 Pages(1000 words)Essay
Critically examine the determinants, the benefits and the risks of Foreign Direct Investment for Developing Countries, using example of countries of your choice
The impact of F.D.I varies with regard to the outlook of a given country. For a developing country the concept of F.D.I brings along the consideration of critically evaluating all the angles and aspects related to its processing
11 Pages(2750 words)Essay
Investment
While modern portfolio allows financial managers to confront risks when making an investment, the theory does not put into consideration the attitudes of individual
6 Pages(1500 words)Essay
Let us find you another Essay on topic Investment Risks for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us