Risk
Diversification
How Does Diversification Reduce Risk? In finance, risk refers to the range of deviation from the forecasted or expected returns. This range is often based on historical statistics […]
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Reader level: Basic
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 […]
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 […]
Risk
Fama-French Model
The Fama-French three-factor model predicts the risk-return relationship better than CAPM.(Nobel Laureate Eugene Fama and researcher Kenneth French, former professors at the University of Chicago Booth School of […]