0
What else can I help you with?
What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
Difference between marginal efficiency of investment and marginal efficicency of capital?
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Basic determinants of investment?
The immediate determinants of investment are: (a) the expected rate of return and (b) the real rate of interest.
How can one determine the expected rate of return for an investment?
To determine the expected rate of return for an investment, one can calculate the average annual return based on historical data, analyze the current market conditions and economic outlook, consider the risk associated with the investment, and use financial models such as the Capital Asset Pricing Model (CAPM) or the Dividend Discount Model (DDM).
What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
Difference between marginal efficiency of investment and marginal efficicency of capital?
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
How is expected rate of return calculated from average rate of return on investment and standard deviation?
The expected rate of return is simply the average rate of return. The standard deviation does not directly affect the expected rate of return, only the reliability of that estimate.
What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Basic determinants of investment?
The immediate determinants of investment are: (a) the expected rate of return and (b) the real rate of interest.
What is the expected rate of return on an investment when you are informed that the price of this investment is actually 3.000.000?
The rate of return (ROI) of an investment depends on many factors including: other costs relating to the use or production of the investment, duration of time held, income produced by the investment, etc.
What rate of return on a security to the expected rate of return on a portfolio?
The rate of return on a security is typically compared to the expected rate of return on a portfolio to assess its contribution to overall portfolio performance. If the security's rate of return exceeds the portfolio's expected rate, it may be considered a good investment; conversely, if it falls short, it might detract from overall returns. Investors often use metrics like the Sharpe ratio to evaluate the risk-adjusted return of individual securities relative to the portfolio. This comparison helps in making informed investment decisions and optimizing asset allocation.
How do you calculate r-r ratio?
The R-R ratio, often used in finance, is calculated by dividing the risk premium of an investment by its expected return. First, determine the risk-free rate (such as the yield on government bonds) and the expected return of the investment. Subtract the risk-free rate from the expected return to find the risk premium. Finally, divide the risk premium by the expected return to obtain the R-R ratio.
How can one determine the expected rate of return for an investment?
To determine the expected rate of return for an investment, one can calculate the average annual return based on historical data, analyze the current market conditions and economic outlook, consider the risk associated with the investment, and use financial models such as the Capital Asset Pricing Model (CAPM) or the Dividend Discount Model (DDM).
What is the interest rate at which the sum of PVs of the expected cash inflows or receipts is equal to the total PV of the investment outlay?
The interest rate at which the sum of the present values (PVs) of expected cash inflows equals the total PV of the investment outlay is known as the internal rate of return (IRR). This rate is a critical metric in capital budgeting and investment analysis, as it represents the expected annualized return on an investment. When the IRR exceeds the cost of capital, the investment is considered favorable. Conversely, if the IRR is less than the cost of capital, the investment may not be worth pursuing.
How can you calculate internal rate of return on investment in real estat?
common stock current price $90 is expected to pay a dividend of $10. Company growth rate is 11%. estimate the expected rate of return on corp stock common stock current price $90 is expected to pay a dividend of $10. Company growth rate is 11%. estimate the expected rate of return on corp stock
Is opportunity cost rate used in the discounted cash flow analysis?
Yes, the opportunity cost rate is commonly used in discounted cash flow (DCF) analysis as the discount rate. It represents the return that could be earned on an alternative investment with a similar risk profile. By using this rate, analysts can assess the present value of expected future cash flows and make informed investment decisions. Essentially, it helps in evaluating whether the investment justifies the foregone opportunities.
