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  • Vels University Executive Placement 2003 Risk-Return

    Transféré par

    Mythili Kumar
    28 vues7 pages
    The document discusses the relationship between investment risk and return. It states that generally, higher potential returns also mean greater risk, while smaller risks mean lower returns. It also contains information about defining financial management, the objectives of financial management including wealth maximization, the types of financial decisions firms make and how they involve risk-return tradeoffs, and defining the concept of risk-return tradeoff. The document is from Vels University and is about their Executive Placement 2003 program and School of Management Studies.

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    risk return

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    Risk Return

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    The document discusses the relationship between investment risk and return. It states that generally, higher potential returns also mean greater risk, while smaller risks mean lower returns. It also contains information about defining financial management, the objectives of financial management including wealth maximization, the types of financial decisions firms make and how they involve risk-return tradeoffs, and defining the concept of risk-return tradeoff. The document is from Vels University and is about their Executive Placement 2003 program and School of Management Studies.

    Droits d'auteur :

    © All Rights Reserved
    Téléchargez comme PPT, PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    28 vues7 pages

    Vels University Executive Placement 2003 Risk-Return

    Transféré par

    Mythili Kumar
    The document discusses the relationship between investment risk and return. It states that generally, higher potential returns also mean greater risk, while smaller risks mean lower returns. It also contains information about defining financial management, the objectives of financial management including wealth maximization, the types of financial decisions firms make and how they involve risk-return tradeoffs, and defining the concept of risk-return tradeoff. The document is from Vels University and is about their Executive Placement 2003 program and School of Management Studies.

    Droits d'auteur :

    © All Rights Reserved
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    Signaler comme contenu inapproprié
    sur 7

    Executive Placement 2003

    School of Management Studies Striving towards Excellence

    BIM

    Risk-Return Trade-off

    S.Vasantha

    Vels University

    www.velsuniv.org

    BIM

    Executive Placement 2003


    School of Management Studies Striving towards Excellence

    There is a fundamental link between an investments


    return and its risk.
    Investment return is the amount of money your
    investment earns.
    Investment risk is the variability of returns and the
    chance that your investment will return less than you
    expect, or your investment makes a loss leaving you
    with less capital than when you started, or your
    investment doesnt even keep up with inflation
    meaning it is worth less over time.
    Volatility is the relative rate at which the price of an
    investment moves up or down.
    Generally, the higher the potential returns, the
    greater the risk. The smaller the potential risks, the
    lower the returns.
    Vels University

    www.velsuniv.org

    Executive Placement 2003


    School of Management Studies Striving towards Excellence

    Risk return Trade off

    BIM

    Financial Decisions of the firms are guided by the Riskreturn trade off. These Decisions are interrelated and
    jointly affect the market value of its shares by
    influencing return and risk of the firm. The relationship
    between return and risk can be simply expressed as
    follows:
    Return= Risk free rate +

    Vels University

    Risk premium

    www.velsuniv.org

    Executive Placement 2003


    School of Management Studies Striving towards Excellence

    Vels University

    BIM

    www.velsuniv.org

    Executive Placement 2003


    School of Management Studies Striving towards Excellence

    BIM

    The chart shows an investment rule of thumb: that cash


    is the least risky, but gives the lowest return over time,
    whereas, shares are the most risky, but should give you
    a higher return over time

    Vels University

    www.velsuniv.org

    Executive Placement 2003


    School of Management Studies Striving towards Excellence

    Vels University

    BIM

    www.velsuniv.org

    BIM

    Executive Placement 2003


    School of Management Studies Striving towards Excellence

    Define financial management. Explain the objectives of


    financial management
    Explain the concept of wealth in the context of wealth
    maximization objective
    What are the major types of financial decisions that a
    business firm makes ? How do they involve risk- return
    trade off?
    Explain point in favor of wealth maximization and profit
    maximization
    Explain about agency problem in detail
    What is meant by risk return trade off?
    Explain the roles of finance manager
    Explain the nature and scope of financial management?
    Vels University

    www.velsuniv.org

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