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I figured it out right after I posted (sorry!): they are called actuaries! Webster Mirriam says an actuary is, "a person who calculates insurance and annuity premiums, reserves, and dividends."

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How do you calculate risk - free return?

Risk free rate of return or risk free return is calculated as the return on government securities of the same maturity.


Why is selling a call or put more risky than buying a call or put?

Selling calls or puts have unlimited risk, where as buying calls or puts have a maximum risk of 100%. For instance, selling a call gives you unlimited risk because there is no ceiling on how high the price can go. However buying a call has a maximum risk of 100% of the premium you pay, this happens if you let the option expire.


What is the market rate of interest formula used to calculate the cost of borrowing money?

The market rate of interest formula used to calculate the cost of borrowing money is: Market Rate of Interest Risk-Free Rate Risk Premium.


How to calculate premium for financial risk?

To calculate the premium for financial risk, you typically assess the potential loss associated with a particular investment or financial decision, taking into account factors such as market volatility, credit risk, and liquidity risk. This involves estimating the expected loss and incorporating the risk-free rate of return and a risk premium, which compensates for taking on additional risk. The premium can be calculated using models like the Capital Asset Pricing Model (CAPM) or through empirical data on historical returns relative to risk. Ultimately, the premium reflects the additional return required by investors to compensate for the inherent risks involved.


Distinguish between systematic and unsystematic risks?

It is the risk which is due to the factors which are beyond the control of the people working in the market and that's why risk free rate of return in used to just compensate this type of risk in market. This is the risk other than systematic risk and which is due to the factors which are controllable by the people working in market and market risk premium is used to compensate this type of risk. Total Risk = Systematic risk + Unsystematic Risk

Related Questions

How do you calculate a histogram percentage?

the answer is one to six million people is the call and the most important people in the stated


How do you calculate absolute risk?

=incidence


How do you calculate risk - free return?

Risk free rate of return or risk free return is calculated as the return on government securities of the same maturity.


Is there a risk playing Call of Duty online?

There is partial risk. There is nothing wrong with the game, it is about the community. As you know, Call of Duty has been given an 18 certificate and some people are 18+. A risk is the emblems. People are able to customize their emblems to literally whatever they like, be it sexual, or curse. Fortunately, there is a report button in which you can report an inappropriate emblem, but this report button does not apply to Black Ops as it is no longer in development. The second risk is the people talking on the headsets, which is the easiest of the risks to stop, you just need to mute them, and finally, if you're okay with violence, there is no problem at all.


How do you calculate risk retention?

no of policies renewed/no of potential renewal policies


Why is selling a call or put more risky than buying a call or put?

Selling calls or puts have unlimited risk, where as buying calls or puts have a maximum risk of 100%. For instance, selling a call gives you unlimited risk because there is no ceiling on how high the price can go. However buying a call has a maximum risk of 100% of the premium you pay, this happens if you let the option expire.


What is the relationship between a regular call option and binary call option and a gap call option?

Regular call options have limited risk and unlimited upside gains while binary call options have limited risk along with limited upside gain.


If a call a guy who is way younger than me and I dont like shorty just to tease him might people think I like him?

You shouldn't be teasing him anyway. Don't call him just to tease him, and if you do that is the risk you take.


What type of EMS call presents the highest risk of liability for the EMT?

Risk and liability in ems


How do you calculate annual risk free rate?

The risk free rate of return is a rate an investor will expect with zero risk over a specified period of time. In order to calculate risk free rate you need to use CAPM model formula ra = rrf + Ba (rm-rrf), where rrf is risk free rate, Ba is beta of security and Rm is market return.


The market risk premium is measured by?

The market risk premium is measured by the market return less risk-free rate. You can calculate the market risk premium as market risk premium is equal to the expected return of the market minus the risk-free rate.


What is the difference between incidence rate ratio and relative risk ratio?

Incidence rate and relative risk are two different measurements used in epidemiology to study illness/disease in specified populations.Incidence rate refers to the number of new cases of a condition in a defined (specified) group or population. It is often expressed as a ratio. For example, if there are 1000 people and 14 of them develop a condition, the incidence rate is 14 per 1000 or 1.4%Relative risk is a measurement that indicates probability of cause. In other words, how likely is it that a place, person or agent is responsible for causing disease/illness.Before you can calculate relative risk, you must first calculate an attack rate on different groups. An attack rate refers to the number of people exposed to an illness compaired to those who actually became sick. To calculate the attack rate, you divide the number of people ill by those who were exposed, and then multiply by 100.To then calculate the relative risk, you divide the attack rate of those sick by the attack rate of those who are not sick.The closer the relative risk is to 1.0, the less likely it is the cause of disease.The higher the relative risk, the more likely it is that it is the cause of disease.