Purchase Solution

Finance: Fair Markets and Assessing Risk

Not what you're looking for?

Ask Custom Question

An important aspect of the decision-making process is the consideration of risks associated with the options in an opportunity set. Measuring the risk of available options can drastically alter the decisions made by an organization's senior management team.

Are markets like the NYSE, NASDAQ, and CME fair markets? Why? Why is it important that such markets are fair markets? In your response, be sure to assess the relationship between market prices and discount rates used in decision making.

Compare a real estate investment in Baghdad with a similar investment in Chicago. What are the appropriate risk-adjusted discount rates for each? How do the risks differ between them?

Would a fast-food a restaurant chain like McDonald's incur more risk by offering a new sandwich or opening a new store? Why?

No - Word Count
Yes - Citations & References

Purchase this Solution

Solution Summary

This solution provides a detailed discussion of the given finance problem.

Solution Preview

Please see the below for the complete tutorial. Thank you for the opportunity to be of assistance and of course, the opportunity to learn as well.
Anna, 108710

Fair Markets and Assessing Risk

First, from my personal experience in investing - buying and selling - of stocks in one of these markets, I would say that they are fair. After all, no investor would be willing to buy or sell at a given price if it is not fair and if prices are not fair, then we can conclude that the market itself is not fair. However, some would argue that NYSE, NASDAQ, and CME are not fair markets. Given the increasing capacity of technologies such ...

Purchase this Solution

Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.