Risk and Return

Risk and Return

Case 1

Question 1

Risk is the probability of an adverse event and its consequences. Financial risk refers to the probability of occurrence of an event that has negative implications for an organization. The concept must be understood broadly, including the possibility that the financial results are higher or lower than expected. In fact, given the possibility that investors make financial bets against the market, these movements in either direction can generate both gains and losses based on the investment strategy.

Question 2

The specific risk would be determined by the standard deviation of the random disturbance. If the random disturbance of movement reflects ...