Essays Tagged: "risk averse"
Why is the risk of a portfolio of shares normally lower than the average risk of the shares of the portfolio?
managers and academic economists have long been aware of the necessity of taking returns as well as risk into account: "all your eggs should not be placed in the same basket". This is where the idea o ... am Sharpe for what has become a broad theory for portfolio selection. Portfolio theory explores how risk averse investors construct portfolios in order to optimise expected returns for a given level o ...
Subjects: Social Science Essays > Economics
Case Study: Caterpillar Inc.: George Schaefer Takes Charge History of Caterpillar, SWOT Analysis, Competitive Environment, Proposed Options, and Recommendations for Growth
materials machinery for more than 50 years. Their global dominance; however, created a stagnant and risk averse environment. Komatsu, a leading Japanese competitor, had gained market share by offering ...
Subjects: Businesss Research Papers
Economic Ramifications of Stringent Tort Laws
co, pharmaceutical and automobile industries in the US. This has resulted in stifled innovation and risk averse behavior on the part of industries in these sectors. We draw parallels from history, whe ... gic behind this reform was to enhance the efficiency of the market. However, strict liability curbs risk-taking ability of companies thereby reducing innovation and creativity. Strict liability has al ...
Subjects: Law & Government Essays > Law
STRATEGIC REASONS FOR HEDGING Financial guarantees serve an important function for virtually every player in the global economy - households, businesses, and governments.
RISK AND UNCERTAINTYSome people don't distinguish between risk and uncertainty. Risk is seen as the ... ssible outcomes, and we are still less able to assessment their likehood of occurrence.ATTITUDES TO RISKWe can distingue three attitudes to risk, averse loving and neutral.Risk-averse: in this case a ... n less satisfaction for each additional than the satisfaction which would be lost from having 1 lessRisk-loving : there is more utility from having additionalRisk-neutral: there is not a preference fo ...
Subjects: Social Science Essays > Economics
Junk bonds market
er by Moody's or Ba3 or lower by Standard and Poor's bond-rating services. Bond ratings measure the riskiness of bonds (that is, the chance that the issuer will be unable to make interest payments or ... s, the chance that the issuer will be unable to make interest payments or repay the principal). The riskier a bond, the lower its rating.Bond investors have traditionally been a risk-averse bunch, and ...
Subjects: Businesss Research Papers > Markets & Exchanges
The Argentine Financial Crisis
n the macro environment had a great effect on international financers who, as a result, became less risk averse. At this point Argentina's debt had become too much for their economy to handle, and the ... owing deficit, an appreciated currency, and a lack of policies to deal with problems, the countries risk premiums increased . This, coupled with increased taxes, and public spending cuts, caused a sec ...
Subjects: Social Science Essays > Economics
Caterpillar Case Study.
materials machinery for more than 50 years. Their global dominance; however, created a stagnant and risk averse environment. Komatsu, a leading Japanese competitor, had gained market share by offering ...
Subjects: Businesss Research Papers > Case Studies
Corporate Finance
oker has advised you not to invest in oil industry stocks because, in her opinion, they are far too risky. She has shown you evidence of how wildly the prices of oil stocks have fluctuated in the rece ... f oil stocks is very high relative to most stocks. Do you think this broker's advice is sound for a risk averse investor like you? Why or why not? Explain briefly.Question 2The Downtown Company has an ...
Subjects: Businesss Research Papers