Purchase Solution

Risk and Capital

Not what you're looking for?

Ask Custom Question

You work for an large investment firm and recently wrote a position article on your firm's approach to investing for the small investor, titled "Investing is for the little guy". The article now appears on your company's website. It has, interestingly enough, generated e-mailed responses from potential clients and your firm is asking you to address some of their questions for a Frequently Asked Questions (FAQ) segment that will be posted to the site soon.
Specifically, some of the respondents have compared investing in the stock market as a no win situation and only the institutional investors can win. These respondents would like a response that further clarifies your firm's position regarding risk in light of these type of statements.

In your response, your company has asked that you address these questions building upon the risk-return concepts you identified in the position piece you wrote for the firm.

Please to provide reference and citation in APA style

Purchase this Solution
Solution Summary

The response addresses the queries posted in 321 words with references.

Solution Preview

The response addresses the queries posted in 321 words with references.

//The given discussion paper is based on two concepts of business, named risk and capital. In this series, the first part of the discussion is including the concept of risk and capital in brief. //

Risk and Capital

It is not true that only the institutional investors can win the stock market, whereas the individual investors have also great chance to earn money because the measurement of historical returns enable the respondents to assess how well they have done and also to estimate about the future returns. The concept of expected risk and expected return are the two key determinants of share / security. Prices are same for the institutional and ...

Solution provided by:
Ashish Sharma, MBA (IP)
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
Recent Feedback
  • "Thank You so much! "
  • "Always provide great help, I highly recommend Mr. Sharma over others, thanks again. "
  • "great job. I will need another help from you. "
  • "first class!"
  • "Thank you for your great notes. Will you be willing to help me with one more assignment? "
Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

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.

Motivation

This tests some key elements of major motivation theories.

View More Free Quizzes
Related BrainMass Solutions

  • Bank Ratios

    and Tier 1 risk based capital ratio equal to or greater than 6%) and thus meeting the required standards.

  • Determining the optimal capital budget

    What is the firm's optimal capital budget? b. Medtronic managers want to consider differential risk in the capital budgeting process. Project A has average risk, B has below-average risk, C has above-average risk, and D has average risk.

  • Risk based capital ratios

    360279 Risk based capital ratios Solve the following problem A large Bank Holding Company has Tier-1 capital of $40 billion and Tier-2 capital of $20 billion and risk weighted assets of $550 billion.

  • Cost of capital for projects with different risks

    72200 Cost of capital Suppose a firm estimates its cost of capital for the coming year to be 10%. What are reasonable costs of capital for evaluating average risk projects, high risk projects and low risk projects.

  • Risk in Capital projects: What analyses would you request?

    The cost of capital may sometimes be adjusted downwards if the project entails less than normal risk. A company can also use sensitivity analysis and simulation techniques to measure and adjust the risk involved in a capital project.

  • Answer the following questions: What is meant by capital str

    How is risk influenced by the capital structure? What is the effect of increased or decreased risk in the capital structure? What is meant by capital structure?

  • Firm uses its company cost of capital to evaluate all projec

    Each project should be evaluated using the project's own opportunity cost of capital. Most projects can be treated and an average risk entity and using the cost of capital provides a useful starting point on average risk projects.

  • Business and Financial Risk: Capital Structure Analysis

    298517 Business and Financial Risk: Capital Structure Analysis Please define business risk and financial risk. Explain their importance in capital structure analysis.

  • Discuss the pros and cons of using this measure

    Cost of capital can also be used to illustrate the relationship between risk and return.

  • What is meant by capital structure?

    This solution provides a definition for capital structure and discusses capital structure measurement metrics and risk. This solution is 452 words.

View More Related Solutions