jawabanujian

3

Value at risk
var measures the worst expected loss over a given horizon under normal market
conditions at a given level of confidence.
in financial mathematics and financial risk management .value at risk is a widely used measure of
the risk of loss on a specific portfolio of financial asset.

Lognormal distribution
In probability and statistics, the log normal distribution is a single-tailed probability distribution
of any random variable whose logarithm is normally distibuted.

Marginal Var
Marginal Var is the partial derivative with respect to the component weight
And, it measures the change in portfolio VaR resulting from adding additional
dollar to a component.

Cash flow at risk
is the cash flow shortfall corresponding to the probability level chosen by the firm.
A firm that depends solely on its cash flow to take advantage of its growth opportunities
has to manage the risk of cash flow for the coming year.

2a CAPM is an important tool used to analyze the relationship betweeen risk and rates of
return.CAPM states that the relevant riskiness of an individual stock is its contribution to the
riskiness of a well diversifed portfolio

2b the concept of beta
the tendency of a stock to move up and down with the market is reflected in its beta coefficient. b.Beta coefficient measures the extent to which the returns of a given stock move with the stock market.
Beta is a key element of the CAPM.

2c. Beta is actually the gradient of the regression line when the return of the stock is plotted with
the return of the market average b= ne(xy)-n(ex)(ey)
nex2-(ex)2

4a. A forward contracts enables company to reduce risk without having to pay an option premium.
The price specified in a forward contract is called the forward price.

4b. e.g. because unexpected lossed due to depreciation of the euro force Garman Corp to reduce
its R&D investment.
Garman's shareholders benefits if Garman succeeds in reducing its exposure to unexpected decreases
in the value of the euro.
the price specified in a forward contract is called forward price.
E.g. if the forward contract obligates Garman to sell euro $100 million at a price of $1 per dollar , it receives $ 100 million at maturity regardless of the price at that time.

4c.In forward contract, one party agree to buy the underlying from another at maturity of the contract and pay for it the price agreed upon when the contract is originated

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