## Project Evaluation

Project Evaluation Today we are going to talk about a project evaluation. As you will remember, sessions three and four, had to do with the estimation of the cost of capital. That cost…

## What is the Cost of Capital?

What is the Cost of Capital? We are talking about the interaction between, corporations and investors in the market, and they need to interact in a market, because investors are the ones…

## What is Diversification?

What is Diversification? The goal of diversification - the ultimate goal of diversification is to maximize, to get the highest possible risk-adjusted returns. Point number two Point number two sort of follows…

## Correlation Matrix

Correlation Matrix Now let's take a look at this correlation matrix. A correlation matrix is simply a collection of, of correlations. And some of those numbers may not be large enough for…

## Portfolio Risk

How to calculate Portfolio Risk? There you have ten years, three assets and let us think of those as annual returns. It does not matter whether these are Dollar returns or Euro…

## How to calculate beta?

How do we calculate Beta (ß)? What is Beta? Beta is not only a widely used measure of risk but also, it is the central magnitude in what we call the…

## Calculate Periodic Returns on an Investment

Calculate Return on Investment How we calculate periodic return? A periodic return is referred to as the return on any given period. In finance, we always look at multiple periods rather…

## Straight Line Depreciation

Straight Line Depreciation What is straight line depreciation? Straight line depreciation is considered as a method through which cost of the plant asset is matched with the period of accounting.…

## Systematic Risk vs Unsystematic Risk

Systematic Risk vs Unsystematic Risk Risk Analysis in Capital Budgeting  Diverse ranges of risks are present in the process of investment. In case the capital is lost completely then you…

## Opportunity Cost and Sunk Cost

Difference between Sunk Cost and opportunity Cost Basically, sunk cost is money that has been spent already. On the other hand, opportunity cost is certain amount of money from which…

## Sunk Cost and Opportunity Cost

Sunk Cost Vs Opportunity Cost Due to confusion in finance related issues, you can be stuck at one point for extended amount of time. It is certainly not a good…

## Portfolio Management Theories

Theories of Portfolio Management Risk Aversion Theory The theory that counts for being risk aversion highlights the fact that the investors always opt for such kinds of investments which are…

## Portfolio Risk Management

Portfolio Risk and Return - Managing Portfolio in the Light of Returns and Constraints The objectives associated with the returns are divided in to several different needs a few of…