Risk & Capital Asset Pricing Model

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RISK & CAPITAL ASSET PRICING MODEL | |
|Every financial investment contains some | |To see how the risk matrix (see below) described in this tutorial is used, please |
|level of financial risk. This risk is | |take a look at FinanceIsland's ROI analysis tool. You can try it out
|usually expressed through the discount rate | |by subscribing for a free trial.
|used in the financial analysis. Since the | |
|risk varies from investment to investment, | |[pic]
|the discount rate needs to vary as well. | |
| | |
|FinanceIsland's ROI analysis tool with Monte| |
|Carlo simulation enhances your typical net | |
|present value (NPV) analysis not only by | |
|embedding Monte Carlo simulation, but also | |
|by helping you to choose a project-specific | |
|discount rate. This project-specific | |
|discount rate allows for "apples-to-apples" | |
|comparison of independent investments | |

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