Asked in Investment Banking
Different between certainty risk and uncertainty risk?
What are the differences between 'risk' and 'uncertainty'?
What is the difference between risk and uncertainty?
What is the different between risk and uncertainty?
What is the difference between risk and ambiguity?
What are the similarities and differences between the risk-adjusted discount rate and the certainty equivalent methods for incorporating risk into the capital-budgeting?
The primary difference between the certainty equivalent approach and the risk-adjusted discount rate approach is where the adjustment for risk is incorporated into the calculations. The certainty equivalent approach penalizes or adjusts downwards the value of the expected annual free cash flows, while the risk-adjusted discount rate leaves the cash flows at their expected value and adjusts the required rate of return, k, upwards to compensate for added risk. In either case the net present value of the project is being adjusted downwards to compensate for additional risk. An additional difference between these methods is that the risk-adjusted discount rate assumes that risk increases over time and that cash flows occurring later in the future should be more severely penalized. The certainty equivalent method, on the other hand, allows each cash flow to be treated individually.
Asked in Small Business and Entrepreneurship
Would you characterize the conditions surrounding NASCAR as conditions of certainty risk or uncertainty Please explain your choice?
Overall, NASCAR is an uncertainty risk as a business model. If there is a great driver, a good car, and the fates choose to smile down, the owner will win tons of money in advertising, and stay comfortably in the black. However, if conditions, some beyond the owner's control, go in the opposite direction, the business will fail, and the owner will sustain a loss. All in all, sports or competition businesses are always a risk.
Asked in Insurance
Who is the insurer in insurance policies?
The Insurer is the Insurance Company which provdes insurance coverage to the insured providing for payment of a sum of money to the person assured or, failing him, to the person entitled to receive the same on the happening of certain event. It is uncertainty that is risk which gives rise to the necessity for some form of proetection against the financial losse arising from death. Insurance substitutes this uncertainty by certainty.
Asked in Investing and Financial Markets
What terms refers to the uncertainty inherent in projections of future ROIC?
What capital budgeting under conditionss of uncertainty or risk?
Capital budgeting entails decisions to commit present funds in long term investment in anticipation of future returns. The future is usually of long term nature spanning over five years. The amount of investment and the returns from the cannot be predicted with certainty due to certain variables like market for the product, technology, government policies, etc. The uncertainty associated with the investment and the returns is what makes decision makers to consider probabilty distributions in their estimates, hence, making capital budgeting to be considered under uncertainty and risk.
Asked in Business & Finance
Difference between types of risk and classification of risk?
Asked in College Savings
What is the meaning of cost of residual uncertainty?
Asked in New York, Economics, Business Ethics
Why do firms exist?
What is capital budgeting decision under uncertainty and risk?
Different between the Risk and return of an investment?
Asked in Chlamydia, Yeast Infections
What is the difference between chlamydia and a yeast infection?