Re: [ vuZs.net ] MGT411- problem plz reply me

PLZ SEND ME THE IDEA SOLUTION MGT411 PLZZZZZZZZZZZZZZ TODAY IS LAST DATE.......PLZZZZZZZZZ.

On Wed, Jun 1, 2011 at 5:15 PM, Mehreen Humayun <mc090400472@vu.edu.pk> wrote:

Solution:

The risk 

premium equals the expected 

return on the risky investment 

minus the risk-free return.

In finance, the risk premium refers to the amount by which an asset's expected rate of return exceeds the risk-free interest rate.

The difference between a rate of return and the risk free rate of return is a risk premium. 

When measuring risk, a common approach is to compare the risk-free return on T-bills(7%) and the risky return on other investments(16%)

Risk premiums may be calculated for a particular security, a class of securities, or a market.

Risk premium = Expected return on risky investment - Risk free investment

= 16% - 7%

Risk premiums= 9

Question # 3
In stock market XYZ company is offering 16% annual return on bonds, however, Treasury Bills are providing 7% annual return. Calculate the risk premium if an investor invest in XYZ company.

Solution:

Risk premium = Expected return on risky investment - Risk free investment

plz elaborate it.

hum konsi cheez ko kahan rakahain gay formula main?

concept bhi explain kar dain. plz

________________

Mehreen Humayun

4th Semester, MBA(Banking)

Distance Learning Student

www.vuzs.net

Quality in Everything We Do

vuZs Banking Group: http://groups.google.com/group/vuzs_banking?hl=en

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