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Risk premium. A risk premium is a measure of excess return that is required by an individual to compensate being subjected to an increased level of risk. [1] It is used widely in finance and economics, the general definition being the expected risky return less the risk-free return, as demonstrated by the formula below.
Credibility theory. Credibility theory is a branch of actuarial mathematics concerned with determining risk premiums. [1] To achieve this, it uses mathematical models in an effort to forecast the ( expected) number of insurance claims based on past observations. Technically speaking, the problem is to find the best linear approximation to the ...
In business and for engineering economics in both industrial engineering and civil engineering practice, the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other projects.
The Capital Market Line says that the return from a portfolio is the risk-free rate plus risk premium. Risk premium is the product of the market price of risk and the quantity of risk, and the risk is the standard deviation of the portfolio. The CML equation is : R P = I RF + (R M – I RF)σ P /σ M. where, R P = expected return of portfolio
The equivalent weight of an element is the mass of a mole of the element divided by the element's usual valence. That is, in grams, the atomic weight of the element divided by the usual valence. [2] For example, the equivalent weight of oxygen is 16.0/2 = 8.0 grams. For acid–base reactions, the equivalent weight of an acid or base is the mass ...
Conversion and its related terms yield and selectivity are important terms in chemical reaction engineering.They are described as ratios of how much of a reactant has reacted (X — conversion, normally between zero and one), how much of a desired product was formed (Y — yield, normally also between zero and one) and how much desired product was formed in ratio to the undesired product(s) (S ...
In stereochemistry, enantiomeric excess ( ee) is a measurement of purity used for chiral substances. It reflects the degree to which a sample contains one enantiomer in greater amounts than the other. A racemic mixture has an ee of 0%, while a single completely pure enantiomer has an ee of 100%. A sample with 70% of one enantiomer and 30% of ...
Risk premium is the added return that investors expect to earn from an asset such as a share of stock that carries more risk than another asset such as a high-grade corporate bond. The risk ...