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Using Boundless Presentations The Appendix The appendix is for you to use to add depth and breadth to your lectures. You can simply drag and drop slides from the appendix into the main presentation to make for a richer lecture experience. Free to edit, share, and copy Feel free to edit, share, and make as many copies of the Boundless presentations as you like. We encourage you to take these presentations and make them your own. Free to share, print, make copies and changes. Get yours at Boundless Teaching Platform Boundless empowers educators to engage their students with affordable, customizable textbooks and intuitive teaching tools. The free Boundless Teaching Platform gives educators the ability to customize textbooks in more than 20 subjects that align to hundreds of popular titles. Get started by using high quality Boundless books, or make switching to our platform easier by building from Boundless content pre-organized to match the assigned textbook. This platform gives educators the tools they need to assign readings and assessments, monitor student activity, and lead their classes with pre-made teaching resources. Get started now at: If you have any questions or problems please

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Types of Risk Measuring Risk Risk Introduction to Risk and Return > Risk Free to share, print, make copies and changes. Get yours at ect&utm_source=boundless

Financial risk is associated to the chances that an investor might lose value in an investment. It is separated into different sources of decline. Often the risks interact with each other and ultimately shock causes panic. Many of the worst market crashes have been a result of widespread speculation and not the devaluation of that asset itself. In the market crash of 2008, investors feared that some home owners would default. It triggered a chain of events that shocked the whole world and left many people in bad financial situations. Types of Risk Free to share, print, make copies and changes. Get yours at ?campaign_content=book_192_section_79&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess View on Boundless.com Introduction to Risk and Return > Risk

The general progression in the risk-return spectrum is: short-term debt, long-term debt, property, high-yield debt, and equity. When a firm makes a capital budgeting decision, they will wish, as a bare minimum, to recover enough to pay the increased cost of goods due to inflation. Risk aversion is a concept based on the behavior of firms and investors while exposed to uncertainty to attempt to reduce that uncertainty. Beta is a measure firms can use in order to determine an investment's return sensitivity in relation to overall market risk. Measuring Risk Free to share, print, make copies and changes. Get yours at ?campaign_content=book_192_section_79&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess Inflation View on Boundless.com Introduction to Risk and Return > Risk

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Key terms inflation An increase in the general level of prices or in the cost of living. systematic risk The risk associated with an asset that is correlated with the risk of asset markets generally, often measured as its beta. Variable Rate Mortgage A variable-rate mortgage, adjustable-rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return

Inflation Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Free to share, print, make copies and changes. Get yours at Wikimedia. "Inflation." Public domain View on Boundless.comPublic domainhttp://commons.wikimedia.org/wiki/File%253AInflation.pngView on Boundless.com Introduction to Risk and Return

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return A company issues a bond with the provision that it may pay off the debt early. This bond is subject to which type of risk? A) Model risk. B) Interest rate risk. C) All of the above. D) Prepayment risk.

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return A company issues a bond with the provision that it may pay off the debt early. This bond is subject to which type of risk? A) Model risk. B) Interest rate risk. C) All of the above. D) Prepayment risk.

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return A relatively new tech company issues a bond that is publicly traded. The company is based in the US and pays interest in dollars. The potential investor lives in the UK. Which of the following risks does the investor face if he buys the bond? A) Market risk. B) Foreign investment risk. C) All of these answers. D) Credit risk.

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return A relatively new tech company issues a bond that is publicly traded. The company is based in the US and pays interest in dollars. The potential investor lives in the UK. Which of the following risks does the investor face if he buys the bond? A) Market risk. B) Foreign investment risk. C) All of these answers. D) Credit risk.

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return Using the Value at Risk methodology, an investment advisor says that she is 90% sure that her investment portfolio will not lose more than $250,000 in a given day. Based on that description, which of the following statements is true? A) It is 90% sure that the portfolio will not earn more than $250,000 in a given day. B) Investors should expect to see losses 1 out of every 10 days. C) The portfolio will lose more than $250,000 every month. D) All of these answers.

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return Using the Value at Risk methodology, an investment advisor says that she is 90% sure that her investment portfolio will not lose more than $250,000 in a given day. Based on that description, which of the following statements is true? A) It is 90% sure that the portfolio will not earn more than $250,000 in a given day. B) Investors should expect to see losses 1 out of every 10 days. C) The portfolio will lose more than $250,000 every month. D) All of these answers.

Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return A portfolio has a 95% certainty that it won't lose more than $50,000 in a given day. On the big loss days, there is a 30% chance the portfolio will lose $50,000 and a 70% chance it will lose $75,000. What is the portfolio's expected shortfall? A) ES_0.05 = $57,500 B) ES_0.05 = $67,500 C) ES_0.95 = $67,500 D) ES_0.95 =$57,500

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Introduction to Risk and Return A portfolio has a 95% certainty that it won't lose more than $50,000 in a given day. On the big loss days, there is a 30% chance the portfolio will lose $50,000 and a 70% chance it will lose $75,000. What is the portfolio's expected shortfall? A) ES_0.05 = $57,500 B) ES_0.05 = $67,500 C) ES_0.95 = $67,500 D) ES_0.95 =$57,500

Attribution Wikibooks. "Real Estate Financing and Investing/Understanding Return and Risk." CC BY-SA Return_Trade_OffCC BY-SA Return_Trade_Off Wikipedia. "Beta (finance)." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Beta_(finance) Wikipedia. "Interest." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Interest Wikipedia. "Risk aversion." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Risk_aversion Wiktionary. "inflation." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/inflation Wiktionary. "systematic risk." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/systematic+risk Wikipedia. "Risk-return spectrum." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Risk-return_spectrum Wikipedia. "Stock market crash." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Stock_market_crash Wikipedia. "Financial risk." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Financial_risk Wikipedia. "Variable Rate Mortgage." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Variable%20Rate%20Mortgage Wikipedia. "Expected shortfall." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Expected_shortfall Free to share, print, make copies and changes. Get yours at Introduction to Risk and Return