Risk and Capital Budgeting参考.pptVIP

Risk and Capital Budgeting 13 Chapter Outline Concept of risk based on uncertainties Investors and their averseness to risk Investors expected higher rate of return on risky projects Simulation models and decision trees Consequences of risky projects both individually and for the firm as a whole Definition of Risk in Capital Budgeting Risk is defined in terms of variability of possible outcomes from a given investment Risk is measured not only in terms of losses but also in terms of uncertainty Variability and Risk The Concept of Risk-Averse Based on the assumption that most investors and man