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?
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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 ...
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Risk Assessment of Strident Marks
The CFO has requested from you, a risk assessment of Strident Marks. Think about the risks inherent in Strident Marks and how to quantify these risks. Calculate the measure of risk for this company (defined as Beta in the Capital Asset Pricing Model - CAPM) and explain why this calculation is a measure of risk. Discuss when this type of calculation is appropriate, and when the coefficient of variation is an appropriate measure of risk. Your work must analyze the specific calculations completed in the task.View Full Posting Details