Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Explain the Compound or
Future value:
Future value (FV) is the esteem of an existing property at a future time, based on an anticipated development rate. For speculators and budgetary organizers, FV is critical since they use it to anticipate how much cash an investment made nowadays will be worth within the future.
Knowing the potential of the long term makes a difference speculators form shrewd venture choices based on their arranged needs. Outside financial components, such as swelling, may moreover antagonistically influence the asset's potential esteem by dissolving its esteem.
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