How Can Risk Influence Risk Premium Essay Example for Free

How Can Risk Influence Risk Premium Essay Risk and return are the fundamental basis upon which investors make their decision whether or not they should invest in a particular investment. How they are related and the influence between the two, is the decision making process that all investors must weigh up. This essay will show how risk can influence risk premium, outlining their relationship and how risk and return are related. Within any investment there is a certain amount of risk, which must be taken into account by an investor when deciding to invest. Risk is defined as the chance of financial loss or, more formally the variability of returns associated with a given asset. This concept in finance is the idea that all investment carries a risk, the higher the risk, the greater the return, however the adverse is also relevant, when the risk of an investment is lower the return is expected to also be lower. However, with all investment there is never a guarantee of return. Return is the total gain or loss experienced on an investment over a given period of time. It is measured by the asset’s cash distributions plus change in value, divided by its beginning-of-period value. (Gitman, et al. , 2011, p. 08) Returns on investment are the motivation to all investors, however as all investment carries a risk, the investor must have a required and expected return on the investment. Expected return, is the return that an asset is expected to produce over some future period of time, while required return, is that which an investor requires an asset to produce if he/she is to be a future investor in that asset. It is here that we see the relationship between risk and return. With the expected and required return on an asset, an investor can calculate the return of an asset and its risk. Kidwell, et al. , 2007, p. 307) To better understand this relationship we must analyse risk premium. Risk premium refers to an asset’s expected rate of return and how that exceeds the risk free rate. The risk free rate is the interest rate of a stable investment usually a government bond or Treasury bill, which is used as a stabilizer and market equivalent in the calculation of the risk and return. (Kidwell, et al. , 2007, p. 307) The required rate of return is therefore based on the expectations of the investor. Risk premium is the compensation for making and undertaking an investment and risk. It is here that we bring all the above mentioned components of risk, return, and risk premium together to formulate: Required rate of return = Risk-free rate of return + Risk premium From this equation we see how risk can influence the risk premium and in turn affect the required rate of return. As risk premium is based on the investor’s compensation for undertaking the risk, we can surmise that the higher the compensation wanted by the investor, the higher the risk will have to be to gain the required rate of return.

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Madison Lamb Louise Pompa English 11A 06 February 2014 Marriage Equality â€Å"Life, Liberty, and the Pursuit of Happiness† is one thing that homosexuals are not permitted to chase. Marriage plays an important role in our society, and I personally don’t believe that people should be allowed to choose who other people are allowed to spend their life with. The right for homosexuals to marry has been a controversial topic since 1924. Denying homosexuals is a violation of our civil rights, and love should not be determined by your gender: love is love. Homosexuals only want one thing and that is a marriage licenses. They want to express their love for their partner, just like heterosexuals do. Heterosexuals have the right to be in love, why shouldn’t homosexuals? Why should homosexuals have to fight for their right to be in love, when heterosexuals can marry, and love anyone they want? Marriage is a beautiful experience where you get to express your love, and your commitment to that person. I believe that everyone should have the right to do so. Homosexuality is becoming an accepted lifestyle nowadays with most evidence strongly supporting marriage equality. According to NCSL, â€Å"as of January 2014, California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington, including the District of Columbia have all legalized same-sex marriage.† Did you know that there is a tremendous amount of 598,791 gay couples, and 71,165 gay marriages? 53% of Americans strongly believe that same sex marriage should be legalized, while on the opposing side, 41% believe same sex marriage shouldn’t be legalized. How can homosexuality a... ...hat everyone thinks is the â€Å"normal†. Understand that everyone is equal, and it should always stay that way. Homosexuality is becoming accepted more and more in America, and whether it’s legalized or not, homosexuals are still going to be with whom they want to be with. Denying homosexuals, or anyone for that matter, is a violation of the civil rights. Discrimination is what’s wrong with our world, and denying homosexuals could put an end to all discrimination. Legalizing homosexuality will make the world a more peaceful place, and will allow each other to see what’s really on the inside. The labeling and homosexual jokes will finally come to an end, and people can love one another without questioning if it’s okay. Everyone is on the journey to find love in the world, and some people find that in the same gender. Love is love, and that’s all it really comes down to.

Iphone 4 Research Paper

Weighing in at just four point eight ounces, the iPhone four is one of the most well-known and incredible touch screen cell phone devices ever made. With so many amazing features, information and capabilities, this phone is undoubtedly a must have of two thousand and twelve. All around the world, you see business professionals making important calls, closing in on company deals and occasionally talking to their spouses about what they will have for dinner. However, these sophisticated workers are not the only people you will see with an iPhone in their hand.Apple Corporation has keenly targeted buyers of all ages with the iPhone’s broad array of capabilities. Starting with elementary aged children, who are lured in by the gaming qualities, along with their parents who want to be able to contact them after school or at soccer practices. For them, it is a fun yet functional addition to everyday life. More common users of the iPhone are Twitter, Facebook and Instagram-obsessed te enagers. Whether it is a sit down dinner or during high school and college classes, teens are always checking for new tweets, messages, status updates and professional looking Instagram photos.Shocking or not, the average teen checks their smartphone around three hundred times per day; twelve and a half times an hour, which equals out at every four point eight minutes. The average adult was not far behind this statistic, as they check primarily their email every twelve minutes. These are just a few different types of iPhone owners, but since there are so many technology savvy people in the world, almost anyone has the ability to use the iPhone.The iPhone has an astonishing sixty four million users throughout the United States, although Droid, Android, and HTC brand phones have claimed fifty one percent of smartphone users and iPhone users hold on closely to that remaining forty nine percent. Another great feature with the iPhone is Siri; interactive software that allows you use your voice to send messages, place calls and even locate the nearest coffee shop. All you do is hold the home button, and Siri will ask you how she can help. As most people know, the iPhone is made with glass on both the back and the front sides, which amounts to a beautiful retina display.This however causes many cracked and shattered expensive-to-fix screens. The five-megapixel camera also draws people to the iPhone since it is one of the best on the market. You will be sure to capture that Kodak moment every time. With a height of four point five inches, a width of two point three inches and a depth of zero point three seven inches, the iPhone most definitely is not the thinnest smartphone on the market. That is the Droid Razr, which is a large competitor to the iPhone, but it does not affect Apple because they have such extreme profits every year.Since the iPhone has eighteen international language options available, it is accessible nearly all over the world. With these great acces sories and uses, the iPhone seems like an ideal choice. Even though the iPhone appears perfect in every way, everything has flaws and there is no way around that. To start off, the iPhone as afore mentioned, is made of glass which causes it to be very fragile. This specific reason is a large contributor to why millions of dollars each year are spent on accessories such as cases and screen protectors, since some people do not purchase a case solely for decoration.One single slip of the fingers and your iPhone can be destroyed. Compared to other smartphones, the iPhone battery life does not stand up to its competitors. The Droid Incredible has a battery life of twenty hours while the iPhone’s lithium battery holds an average of seven hours of use. Few things in my opinion could be worse than a dead phone when you need it most. Another weakness the iPhone has is its lack of availability for a memory card to be inserted. This drives away the smartphone users who have thousands of songs in their iTunes libraries, hundreds of pictures and videos along with the large gigabyte use for gaming apps.Another downfall would be the price. The phone itself is six hundred dollars if it needs to be replaced. It is no doubt worth that much, but since apple makes so much money the price should be lowered. A Droid Razr has almost all of the same features as the iPhone yet it only cost three hundred and fifty dollars. If I could personally change one thing about the iPhone, it would be the maps application. It should have turn-by-turn navigation similar to a real GPS.The iPhone is extremely difficult to use for directions if you are driving, not to mention dangerous while one attempts to read the confusing map. The map does not point you in the direction you are going; it points you in the direction that you are coming from. Overall, I believe the strengths outweigh the weaknesses and sixty four million other people must agree with me. The iPhone is used all over the world by many different people and for many different things including maps, the outstanding camera, its retina display, fast internet speed and everything else it contains.Overall, it would be a great investment for someone who needs a phone that does more than call. Although the iPhone has a few imperfections, its vast array of features makes it hard to pass up. http://www. apple. com/iphone/iphone-4/specs. html http://www. pcmag. com/article2/0,2817,2397688,00. asp http://articles. businessinsider. com/2010-01-13/tech/30018103_1_screen-repair-kit-iphone http://www. apple. com/iphone/built-in-apps/maps-compass. html http://articles. latimes. com/2012/jun/12/business/la-fi-apple-20120612

The Relationship between African Americans and Racism

The essence of this essay reveals the definition of human rights and the politics of its victimhood incorporating those that made a difference. Human Rights can be seen as having natural rights, a fixed basis in reality confirming its importance with a variety of roles; the role illuminated will be racial discrimination against African Americans. The Preamble suggests its determination to affirm human rights, rights for both men and women without the discrepancy of race. Sadly most people don’t know their rights, but do agree it’s based on respecting the individual, and as a human being we are entitled to it; who’s deserving and who’s not is not a determining factor, however being alive is. According to Cranston (1973) â€Å"The language of†¦show more content†¦He had an urgent obligation to freedom and human rights for all oppressed people in addition to spearheading a number of labor and political organizations to draw African American workers into the labor movement ranks; this was accomplished with little encouragement from the racist trade unions of that era (Hill, 2002). We are taught from a symbolic interactionist perspective racial socialization often give way to a sense of solidarity, a union with one’s ethnic group which can tribute to the hostility demonstrated towards another group. Another familiar term ethnocentrism, a place of superiority which contains the notion one’s ethnic group is superior while the other is inferior which proves the further we are from human values and the promotion of it peace can never be achieved. The Dalai Lama says if we have peace in us we can be at peace with those around us. We’ve often heard the terminology â€Å"white racism† which is a socially organized attitude by a group of people who share the same identity, members of the dominate group which undercuts the subordinate group from having the right of opportunity and freedoms to say the least. From the functionalist perspective racism, prejudice or any type of societal disharmony is dysfunctional; with further investigation the solution made available isShow MoreRelatedRacism Is A Major Issue And Problem That Has Plagued The United States Of America1551 Words   |  7 PagesRacism is a major issue and problem that has plagued the United States of America for years. Racism has been around in our country since well before the Civil war and even today we still have people who are prejudice towards other races, but discrimination and other major issues had finally become illegal in the end of the 1960’s with the civil rights movement. 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