Question

If a firm underestimated the risk, that is the opportunity cost of two mutually exclusive projects

One variable at a time related to the project are randomly, repeatedly modified using a computer program to develop a very wide range of NPVs, which can then be averaged to give an idea of the expected outcome best describes

Historically, which financial asset has exhibited the most risk for an investor?

Answer 1

A financial asset is an asset whose value is derived from a contractual claim, such as bank deposits, bonds, and stocks. Financial assets are more liquid than other assets, such as commodities or real estate, and may be traded on financial markets.

Equity shares in particular are more risky form of financial asset for an investor. Shares represent ownership percentage in the company. Performance of these financial assets depend majorly upon how well the company performs . However with high risk comes chances of high reward thats what makes these investment such an attractive option. The return on the equity may be in the form of capital appriciation or in the form of dividend.