What is value at risk, VaR?

Q: What is par value?

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: What is investment timing option?

A: Option with reference to investment or project refers a significant option that can affect the…

Q: Define then discuss Value-at-Risk.

A: The stock market is full of new policies and procedures. It get impacted by change in the government…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: What is the significance of the Value at Risk (VaR) method?

A: The question is based on the concept of Value at Risk (VaR). VaR is a statistical measure of risk in…

Q: What is the Aggregating Risk over Time?

A: Aggregating Risk over time is the measure of a solitary customer's presentation of a foundation or…

Q: Explain what is risk decompositon

A: Risk is referred as the future uncertainty with reference to the deviation from an expected earnings…

Q: What Does RiskReally Mean?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: Define Risk in general

A: In finance, risk is defined as the level of vulnerability that potentially creates financial loss…

Q: What is reinvestment rate risk?

A: The reinvestment rate risk is the potential decline in the interest income that tends to be a result…

Q: What is event risk?

A: Event risk is the likelihood of a sudden event adversely affecting an organization, industry, or…

Q: What is option?

A: Options are the derivatives contract that gives investor discretion to sell or buy the assets like…

Q: What is the risk free return?

A: Rate of return is the return percentage which an investor gets from the money which has been…

Q: Define the term Trade-Off between Risk and Reward?

A: Risk-Reward trade off refers to an investment principle which indicates higher the risk, higher is…

Q: Explain risk-neutral valuation

A: A risk-neutral valuation is a probability measure used to help pricing derivatives and other…

Q: What is future value, FV?

A: Future Value: The future value is the value of the present amount compounded at an interest rate…

Q: What is the risk premium?

A: CAPM is the method of calculating the expected return on investment. The formula to calculate the…

Q: Define net realization value?

A: Net realizable value means the amount that could be received after deducted all incidental expenses…

Q: What is risk and give examples

A: While making investment decisions risk and return should be taken into consideration.

Q: What is net present value (NPV) profile?

A: Net present value profile is mainly the graphical representation of net present value of different…

Q: present worth analysis, whic

A: Introduction: Present worth analysis is defined as analysis in which the cash flows of the project…

Q: What is the difference between systematic risk and unsystematic risk? Give an example of each.

A: Risk: The possibility that the actual outcome in a situation will differ from the expected outcome…

Q: What is risk return ratio?

A: Any susceptibility a corporation or organization has to factors that might affect profitability or…

Q: Is funding a type of risk?

A: Funding means providing the funds to the party and charging interest rates from them. Firms need…

Q: Explain the Trade-Off between Risk and Reward?

A: The trade-off means to lose one thing to achieve another thing. For example An organization is…

Q: What do "threat," "vulnerability," and "risk" really mean?

A: Threat : A declaration of purpose to cause someone pain, harm, damage, or other hostile action as…

Q: How are total risk, nondiversifiable risk, and diversifiable risk related? Why is nondiversifiable…

A: Total risk is measured by the standard deviation of returns; it has two elements non-diversifiable…

Q: What is the net present value method?

A: Net Present Value Method: It is the present value of the annual cash flows and the project initial…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: What is objective risk

A: Risk means the possibility of happening loss. Risk is directly related to the loss. If the amount of…

Q: What is net present value (NPV) method?

A: Capital budgeting can be defined as the decision making process employed by businesses wherein, a…

Q: What is present value interest factor?

A: The present value interest factor is a mathematical equation used to estimate today's value of money…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: Define risk-free asset?

A: Risk-free means that anything which does not have any kind of risk associated with it. They are free…

Q: What is Net realizable value?

A: Net realizable value means the amount that could be received after deducted all incidental expenses…

Q: what is opportunity risk

A: Opportunity risk is a the risk off loosing a better opportunity i.e. if you have invested in a…

Q: How is VaR used to limit risk?

A: Value at Risk (VaR) a statistical tool which measures and quantifies financial risk a firm or…

Q: What risk does Beta measure?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk 1. Systematic risk : It is…

Q: Define a risk event.

A: Risk Event:  When an event can cause losses to the company's stakeholders and investors due to…

Q: what is the risk-free rate (rf)?

A: Risk free rate is also called as treasury bill rate. This treasury bill rates are free from default…

Q: What is Net Present Value (NPV)?

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: What is notional value?

A: Notional value is used to value the underlying asset. In simple words it tells how much of value a…

Q: Define value at risk (VaR)

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…