Risk
Risk & Return
Ideas on Risk and Return The ideas about risk and return belong to Harry Markowitz, who published his work back in 1952. It is said that it didn’t […]
Archive
Category: Principles of Corporate Finance – by F. Allen, R. A. Brealey, & S. Myers
Risk
Financial Risk
How is Portfolio Risk Calculated? In the previous entry, I discussed the essence of diversification. Now let’s take a look at specific formulas, as shown in the image. […]
Risk
Project vs Organizational Risk
Factors Influencing Systemic Risk of a Project and How It May Differ from an Organization’s Systemic Risk When a specific project differs from the core operations of an […]
Risk
Certainty Equivalent
Valuation models for derivative assets hold the same significance in finance as relativity theories do in physics… In this entry, I want to address the method of discounting […]
Risk
CAPM-Model
Why is Understanding the CAPM Model Crucial for Senior Management? Given that the main task of management, particularly strategic financial management, is to increase the value of the […]
Market Efficiency
CAPM Pitfalls-1
If you plan to profit from investing in stocks, take a close look at this graph. The graph highlights two significant phenomena that the Capital Asset Pricing Model […]
Market Efficiency
CAPM Pitfalls-2
Regardless of the level of diversification, why is it more rational to invest in a low β portfolio than a high β one? The issue is that CAPM’s […]