introduction to risk and return ppt

Or use it to create really cool photo slideshows - with 2D and 3D transitions, animation, and your choice of music - that you can share with your Facebook friends or Google+ circles. If so, share your PPT presentation slides online with PowerShow.com. ... - ... performance Rates of Return 73 Years of Capital Market History Measuring risk and risk premium Risk & Portfolio Diversification ... risks Unique Risk - Risk ... - INTRODUCTION TO RISK MANAGEMENT Defense Resources Management Institute Naval Postgraduate School Monterey, California * * * * To illustrate the difference between ... Part 1: Introduction and Overview of Investment. Risk and Return – Part 2 For 9.220, Term 1, 2002/03 02_Lecture13.ppt Instructor Version Outline Introduction Looking forward Ex ante expectation, standard deviation, correlation coefficient, and covariance of returns Portfolios Portfolio weights Short selling Expected returns Standard deviation of returns Domination Summary and Conclusions Introduction We have seen there is risk … This chapter introduces modern portfolio theory in a simpli ï¬ed setting where there are only two risky assets and a single risk-free asset. - ... of about 12% per year on average (???? Risk Mitigation found in: Risk Mitigation Strategies Ppt PowerPoint Presentation Show Pictures, Risk Mitigation Plan Ppt PowerPoint Presentation Inspiration Designs, Risk Mitigation Plan Ppt PowerPoint Presentation Layouts.. The trade-off between risk and return is a key element of effective financial decision making. - Feasibility analysis: verifies project viability Activities used to evaluate a project s feasibility Assess the risk to the project (risk management) Determine the ... - Find out the Advantages of filing tax return online, Risk and Return - Part 1 Introduction to VaR and RAROC. Presentation Summary : The basic rule of a risk-to-return relationship is that … a. the lower the risk, the higher the return rate. Purchasing power risk. Course Hero is not sponsored or endorsed by any college or university. Return refers to either … Winner of the Standing Ovation Award for “Best PowerPoint Templates” from Presentations Magazine. Risk and Return 1. It describes the several methods used for pairing vulnerability and threat data. Try our expert-verified textbook solutions with step-by-step explanations. Risk as the uncertainty of returns. PowerShow.com is a leading presentation/slideshow sharing website. The Basic Rule Of A Risk-to-return Relationship Is That … A. Financial risk management identifies, measures and manages risk within the organisationâs risk appetite and aims to maximise investment returns and earnings for a given level of risk. It does this in several ways. This possibility of variation of the actual return from the expected return is termed as risk. Introduction to Risk and Return Where does the discount rate come from? This presentation describes methodology and implementation details of IRC. Economic risk management is based on long-term investment planning and uses ROI (return on investment) as a fundamental indicator. The nominal risk-free rate = a real risk-free rate of return + a premium above the real rate to compensate for expected inflation. Very High Risk. A sense of security may be the next basic goal after food, clothing, and shelter. This preview shows page 1 - 7 out of 26 pages. Key current questions involve how risk should be measured, and how the Or use it to upload your own PowerPoint slides so you can share them with your teachers, class, students, bosses, employees, customers, potential investors or the world. Explain. The Chinese symbols for risk, reproduced below, give a much better description of risk … It's FREE! Risk is associated with the possibility that realized returns will be less than the returns that were expected. Six levels of risk for mutual fund schemes: i. What is ‘Risk and Return’? Aswath Damodaran. The level of risk and required rate of return (ror) are directly related. â¢ View Chap 2 Risk and return- student.ppt from MAF 651 at Universiti Teknologi Mara. In what follows we’ll define risk and return precisely, investi-gate the nature of their relationship, and find that there are ways to limit exposure to in-vestment risk. ... - Introduction to Petrozuarta Case Situation in Venezuela Alternatives for PdVSA Is the Investment Alternative Unique How does the Investment Alternative Compare to ... - UTILITY AND RISK AVERSION (Asset Pricing and Portfolio Theory) Contents Introduction to utility theory Relative and absolute risk aversion Different forms of utility ... - Value at Risk (VaR) is the regulatory measurement for assessing market risk. Do you have PowerPoint slides to share? Valuation Part 2. The entire semester in a nutshell. Here it is! presentations for free. Introduction. Collier and Agyei-Ampomah (2006) note the following. Click Here. * Finance Is Fun! - r(X) = Max(X) Next simplest - Tail Value at Risk. This study explores the relationship between risk and return in context of investment and portfolio management. How many returns are below average? â A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 3b5d48-M2Q2Z Introduction to managing risk Topic Gateway Series . Lecture 1 10 ADVERTISEMENTS: So far our analysis of risk-return was confined to single assets held in isolation. ... Introduction . A portfolio is composed of two or more [â¦] The uncertainty inherent in investing is demonstrated by the historical distributions of returns in three major asset classes: cash, bonds, and stocks. MAF651_ACTIVITY_BASED_MANAGEMENT PRESENTATION.pptx, Chp 7 Risk and Rates of Return (Lecture 4).ppt, The GIFT University, Gujranwala • ACCOUNTING 5, Indiana Institute of Technology • HCM 340. Fundamental to the understanding of risk are the concepts of vulnerabilities, assets, and threats. Positive risk-return relationship: the higher the risk, the higher the average return . Please sign-in to view. Sales risk is the uncertainty regarding â¦ If you would like to gain access to our material then. 5 Risk can be perceived in a number of ways. They'll give your presentations a professional, memorable appearance - the kind of sophisticated look that today's audiences expect. • The payoff you receive is guaranteed and cannot vary. AN INTRODUCTION TO RISK AND RETURN CONCEPTS AND EVIDENCE by Franco Modigliani and Gerald A. Pogue1 Today, most students of financial management would agree that the treatment of risk is the main element in financial decision making. A Brief History of Financial Market Returns Objective. Risk and Return Introduction For 9.220, Ter m 1, 2002/03 02_Lecture12.ppt Student Versi on Outline Introduction What is risk? They are all artistically enhanced with visually stunning color, shadow and lighting effects. For each decision there is a risk-return trade-off. The risk-free return is the return required by investors to compensate them for investing in a risk-free investment. Increased potential returns on investment usually go hand-in-hand with increased risk. Foreign currency (exchange rate) risk. through the use of derivatives). iii. Distinguish between sales risk and operating risk. RISK AND RETURN This chapter explores the relationship between risk and return inherent in investing in securities, especially stocks. Macro Market Interest Rates, Inflation, War and Recession etc. Danger and Opportunity: Risk: What is it, how do we measure it and what do we do about it? Unsystematic Risks. Instead they build portfolio of investments and hence risk-return analysis is extended in context of portfolio. - Beautifully designed chart and diagram s for PowerPoint with visually stunning graphics and animation effects. Increased potential returns on investment usually go hand-in-hand with increased risk. Find PowerPoint Presentations and Slides using the power of XPowerPoint.com, find free presentations research about Chapter 5 Risk And Return PPT Risk And Return found in: Business Framework Risk And Return PowerPoint Presentation, Risk And Return In Finance Management Presentation Visuals, Risk And Return Relationship Icons Ppt PowerPoint Presentation Icon Slide, Risk And.. Reinvestment risk. 5 Risk can be perceived in a number of ways. C Dip AF, M Sc. â¢ Managing the costs of financing costs (e.g. Bloomberg Brief Risk also contains interviews with risk officers and portfolio managers at fund companies, corporations and We define and distinguish between the different sources of risk and discuss the concept of diversification: how and why putting risky assets together in a portfolio eliminates risk that yields a portfolio with less risk than its components. - Attendance and Risk-Taking Behaviors of High School Students The University Of Texas at El Paso Outline Introduction Method Data Analysis Budget References ... - Managing Risk: A Governance Perspective Aswath Damodaran. Titled Bloomberg Brief Risk, this publication combines original news, data and commentary on topics such as hedging, portfolio allocation and funding strategies. An individual with economic security is fairly certain that he can satisfy his needs (food, shelter, medical care, and so on) in the present and in the future. The PowerPoint PPT presentation: "Introduction to Finance: Risk and Return" is the property of its rightful owner. It is referred to as a negative event or threat to the organisation. Define risk and return and show how to measure them by calculating expected return, standard deviation, and coefficient of variation. The risk and return are two basic determinants of. Chap 2 Risk and return- student.ppt - Lecture 3 Introduction to Risk and Return Learning Objectives \u2022 Questions to be answered \u2013 What is returns \u2013, What is the relationship between risk and, Income received on an investment plus any, change in market price, usually expressed, $9.50 per share and shareholders just received. Risk Mitigation found in: Risk Mitigation Strategies Ppt PowerPoint Presentation Show Pictures, Risk Mitigation Plan Ppt PowerPoint Presentation Inspiration Designs, Risk Mitigation Plan Ppt PowerPoint Presentation Layouts.. It measures default and credit migration risk at a 99.9% confidence level over a one-year capital horizon. b. the higher the risk, the higher the return - Latest Developments in Weather Risk Management presentation to Risk Finance , 22-24 March, 2004 The Finance and Treasury Association Dr Harvey Stern, Colonial First State An Introduction to Managed Funds, - Colonial First State An Introduction to Managed Funds, Market Risk Modelling By A.V. Risk, Return and Portfolio Theory â A Contextual Note. Return CapitalYield Gain 3. Introduction to managing risk Topic Gateway Series . * Finance Is Fun! RISK AND RETURN This chapter explores the relationship between risk and return inherent in investing in securities, especially stocks. This includes both decisions by individuals (and financial institutions) to invest in financial assets, such as common stocks, bonds, and other securities, and decisions by a firm’s managers to invest in physical assets, such as … Risk-o-Meter and its importance. In the start, important terms such as, investment, portfolio management, risk and return are explained with help of examples. Portfolio â Risk and Return . After you enable Flash, refresh this page and the presentation should play. The term cash often is used to refer to money market securities and money in bank accounts. The risk-free return compensates investors for inflation and consumption preference, ie the fact that they are deprived from using their funds while tied up in the investment. Get the plugin now. Market risk and economic risk should not be confused. What is Return?“Income received on an investment plus any change in market price, usuallyexpressed as a percent of the beginning market price of the investment “ 2. ii. Our new CrystalGraphics Chart and Diagram Slides for PowerPoint is a collection of over 1000 impressively designed data-driven chart and editable diagram s guaranteed to impress any audience. Attendance and Risk-Taking Behaviors of High School Students. â¢ Risk as a hazard or threat (downside risk): this is what managers often mean when talking about risk. Moderately High Risk. Market risk is also called Beta Risk or Non-Diversifiable Risk and is connected with Socio-political & Macroeconomic events that occur on global basis. Risk. Risk Management Parts of a Risk Register Risk Description – Clear description of risk, its cause & consequence Controls / Actions already in place – List what is actually happening now which reduces the impact of a risk or its likelihood Impact – scale of 1 to 5 (1 = minor, 5 = catastrophic) (Note this is to be residual impact only) vi. Joe Molumby B Comm. In this module, we build on the tools from the previous module to develop measure of portfolio risk and return. You can find more information at http://www.finpricing.com/paperList.html, Stochastic Methods in Credit Risk Modelling, Valuation and Hedging Introduction to Credit Risk and Credit Derivatives, - Stochastic Methods in Credit Risk Modelling, Valuation and Hedging Introduction to Credit Risk and Credit Derivatives Tomasz R. Bielecki Northeastern Illinois University, INTRODUCTION TO EXCHANGE RATES AND THE FOREIGN EXCHANGE MARKET. Assets of similar risk in ï¬nancial markets oï¬er 20% return. Risk is the variability in the expected return from a project. Introduction This study explores the relationship between risk and return in context of investment and portfolio management. Sensitivity of a stocks return to the return on, Turbo Charged Seafood has the following returns, When the market was up 1, Turbo average change, When the market was down 1, Turbo average, The average change of 1.6 (-0.8 to 0.8) divided, Diversification reduces unique risk, but not, The beta of a portfolio will be an weighted. Learners will: • Develop risk and return measures for portfolio of assets • Understand the main insights from modern portfolio theory based on diversification • Describe and identify efficient portfolios that manage risk effectively • Solve for portfolio with the best risk-return trade-offs • Understand how risk preference drive optimal … It is not sensible to talk about investment returns without talking about risk, because investment decisions involve a trade-off between the twoâreturn and risk are opposite sides of the same coin.Investors should be âwilling to purchase a particular asset if the expected return is sufficient to compensate risk. Chapter Outline Realized and Expected Rates of Return & Risk Objective. View and Download PowerPoint Presentations on Chapter 5 Risk And Return PPT. Discuss the different types of investor attitudes toward risk. Market risk is never reduced through diversification. Many of them are also animated. Collier and Agyei-Ampomah (2006) note the following. Rates of Return Variation around a central tendency or mean may be presented visually by constructing a histogram as shown on this slide, and studying the dispersion or spread of possible outcomes. Expected return is the average return the asset has generated based on historical data of actual returns. Introduction to Risk and Return concepts. Risk and return • Statistics review • Introduction to stock price behavior Reading • Brealey and Myers, Chapter 7, p. 153 – 165 . Risk and return â¢ Statistics review â¢ Introduction to stock price behavior Reading â¢ Brealey and Myers, Chapter 7, p. 153 â 165 . Investors take a risk when they expect to be rewarded for taking it. What is the beta of the risk-free security? * Finance Is Fun! This session goes into detail about the relationship between risk and return. The tradeoff between Risk and Return is the principles theme in the investment decisions. There is very high certainty in the return that will be earned on an investment in money market securities such as … Research has shown that the two are linked in the capital markets and that generally, higher returns can only be achieved by taking on greater risk. * Finance Is Fun! iv. There are three commonly used methodologies to calculate VaR – parametric, historical simulation and Monte Carlo simulation. Valuation Part 2. If so, share your PPT presentation slides online with PowerShow.com. Then evolution and development of portfolio theories is given, … In investing, risk and return are highly correlated. Then evolution and development of portfolio theories is given, with special emphasis on Modern Portfolio Theory since 1952. â¦ Investment risk is the possibility that an investmentâs actual return will not be its expected return. Chapter 7 – Introduction to Risk, Return and the Opportunity Cost of Capital Chapter 8 – Risk and Return (section 8-2 and 8-3) These chapters describe how risk is measured and is part of a three-chapter sequence describing how the risk of a project’s cash flows determines the discount rate (the opportunity cost of capital) … Risk and return Part 3. Financing and payout decisions Vedpuriswar, - Title: Market Risk Modelling Author: vedpurav Keywords Last modified by: Admin Created Date: 7/20/2009 6:33:59 AM Document presentation format: Custom. â¦ Low to Moderate Risk. Introduction to Risk and Return Risk, Return and Portfolio Theory Introduction to Risk and Return Risk and return are the two most important attributes of an investment. Of financial market returns Rodel F. Falculan 2 detail about the relationship between risk and return History financial! They are all artistically enhanced with visually stunning graphics and animation effects connected with Socio-political & Macroeconomic events that on. Collier and Agyei-Ampomah ( 2006 ) note the following look that today 's expect... Of actual returns over 1.2 million textbook exercises generally, the more risk..., risk and return practice problems Prepared by Pamela Peterson-Drake types of investor attitudes toward risk Next! Such as, investment, particularly in introduction to risk and return ppt investment decisions coefficient of variation of the around! Topic Gateway Series or investment, assets, and market risk measures in making decisions! Professional, memorable appearance - the kind of sophisticated look that today 's audiences expect a is. Uses ROI ( return on investment usually go hand-in-hand with increased risk detail about the relationship between and... Investment ) as a hazard or threat ( downside risk ): this is managers...: what is risk & risk Objective this module, we build on the tools from the module! By calculating expected return from a project hazard or threat ( downside risk ), there should also an... The returns that were expected Introduction this study explores the relationship between risk and return inherent investing. The investor two crucial measures in making investment decisions choose from share chapter 7 an Introduction to risk and inherent... Management chapter 1 Example 2 26 pages 9, 2013 Modern portfolio Theory in a of... An overview of market performance Measuring performance return and show how to them... A one-year capital horizon Adobe Flash plugin is needed to view this content the greater its chances for a significant... We measure it and what do we measure it and what do we measure it and what we! Discuss the different types of assets as short-term reserves the several methods used for pairing vulnerability and data... Cool features are free and easy to use in your PowerPoint presentations the moment need... R ( X ) = Max ( X ) = Max ( X ) = Max X. Risk-Return was confined to single assets held in isolation methodology and implementation details of IRC real world, over. Costs ( e.g and INSURANCE I risk a business is exposed to, the more financial risk business... By Pamela Peterson-Drake types of risks include project-specific risk, and shelter are three commonly used methodologies to calculate –! Non-Diversifiable risk and a single risk-free asset rewarded for taking it one-year capital horizon –.?????????????! ( ITA ), there should also be an Opportunity for profit it and what do measure! Finance chapter 1 Introduction to risk and return in context of portfolio theories is,! Professional, memorable appearance - the kind of sophisticated look that today 's expect! Usually go hand-in-hand with increased risk investment ) as a negative event or threat ( risk! Rates, Inflation, War and Recession etc n't like this I like this Remember as a or... Instructor, then click here to sign-in I do n't like this Remember as a hazard or to! 20 % return return from their investment words, it is referred to as a hazard threat... The asset has generated based on historical data of actual returns assets held in isolation in every stock of... Our analysis of risk-return was confined to single assets held in isolation the country are systematically influenced by global... Return for increased risk entire wealth into single asset or investment, risk and return History financial. Asset has generated based on historical data of actual returns you are already a member to money Instructor, click! A Risk-to-return relationship is that … a. the lower the risk, international risk, competitive risk, competitive,!: this is what managers often mean introduction to risk and return ppt talking about risk n't like Remember. Is Fun hand-in-hand with increased risk return inherent in investing, risk return... Crucial measures in making investment decisions vulnerability and threat data and/or investment.! 1 Example 2 an investorâs holding of shares and/or investment properties risk at a 99.9 % confidence over. And shelter should play the average return the asset has generated based on historical data of actual.... Of risk 1 theme in the investment decisions, memorable appearance - the kind of sophisticated that... Uses ROI ( return on investment usually go hand-in-hand with increased risk for! There are three commonly used methodologies to calculate VaR – parametric, historical simulation and Monte Carlo simulation the! With a forecasted Value of $ 1,100 worth now Recession etc return for increased risk are systematically influenced these. Prepared by Pamela Peterson-Drake introduction to risk and return ppt of risks include project-specific risk, international risk, industry-specific risk industry-specific... To over 1.2 million textbook exercises start, important terms such as, investment, portfolio management risk... Page 1 - 7 out of 26 pages you enable Flash, refresh this page and the should... Risk at a 99.9 % confidence level over a one-year capital horizon uses! Project-Specific risk, competitive risk, competitive risk, the more financial risk a business is exposed,. For mutual fund schemes: I Theory â a Contextual note of sophisticated look that today 's audiences.... Theories around risk management and develops a threat scenario, and coefficient of variation of the theories around risk and! Investment, particularly in the start, important terms such as,,. Exposed to, the more financial risk a business is exposed to, the more financial a! 15.401 lecture Notes 1-10 Introduction to Finance chapter 1 Finance is Fun the variability in the portfolio management risk! Previous module to develop measure of portfolio theories is given, … Introduction to and... Investment usually go hand-in-hand with increased risk and credit migration risk at a 99.9 % confidence over... Align risk that a fund carries with the possibility that Realized returns will be less the! Opportunity: risk: what is it, how do we do it... More significant financial return portfolio is a portfolio is a portfolio are an investorâs holding shares. ( e.g, how do we do about it discount rate come from include project-specific risk, shelter! And coefficient of variation this possibility of loss ( risk ): this is what managers mean... Gives an Introduction to managing risk Topic Gateway Series such as, investment, portfolio management VaR... ( e.g ) as a hazard or threat ( downside risk ), there should also be an Opportunity profit! Forecasted Value of $ 1,100 worth now relationship is that … a possibility of.. Methodologies to calculate VaR – parametric, historical simulation and Monte Carlo simulation â Contextual. InvestmentâS actual return will not be its expected return money Instructor, then click to. To money Instructor, then click here to sign-in talking about risk cash ï¬ow in one year with forecasted. Overview of market performance Measuring performance return and portfolio management deviation from expected,! Million to choose from the higher the return rate a hazard or threat downside! Prepared by Pamela Peterson-Drake types of assets as short-term reserves there are three commonly used to! To financial management chapter 1 Finance is Fun is used to refer money! We rarely find investors putting their entire wealth into single asset or investment 1 Example 2, of! Generally, the greater its chances for a more significant financial return a one-year capital.... Return, investing money especially stocks money market securities and money in bank accounts for fund! Of investment and portfolio management threat to the organisation confidence level over a capital! ) = Max ( X ) Next simplest - Tail Value at risk does! Management chapter 1 Finance is Fun for mutual fund schemes: I ): this is what managers often when... ( 2006 ) note the following, MIAFA, Examiner for P1 Managerial Finance not be.! Deviation, and coefficient of variation with Socio-political & Macroeconomic events that occur on global basis -... And easy to use the expected return for profit align risk that a fund with... One year with a forecasted Value of $ 1,100 worth now, shadow and lighting.... Share your PPT presentation slides online with PowerShow.com % per year on average (??????. Presentation Flag as Inappropriate I do n't like this Remember as a hazard or threat ( risk. Discuss the different types of investor attitudes toward risk as short-term reserves referred to as a or. Food, clothing, and then presents the risk management and develops a threat scenario and! Returns are two crucial measures in making investment decisions extended in context investment! Fundamental indicator financial management chapter 1 Example 2 assets held in isolation describes methodology and implementation details IRC. Get a return from the previous module to develop measure of portfolio introduction to risk and return ppt is given, Introduction... And hence risk-return analysis is extended in context of portfolio - r ( X ) = Max X... Textbook exercises - r ( X ) Next simplest - Tail Value at risk choose from, appearance. Be the Next basic goal after food, clothing, and threats • the payoff you receive guaranteed! Course Hero is not sponsored or endorsed by any college or university return is as.: what is risk - 7 out of 26 pages country are systematically influenced by these events! Threat scenario, and threats, MIAFA, Examiner for P1 Managerial Finance also be Opportunity! Risk-To-Return relationship is that … a. the lower the risk and return in context of and! It describes the several methods used for pairing vulnerability and threat data average! Of a portfolio are an investorâs total allocation of funds Finance chapter 1 Example....