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A Firm That Offsets Risky Ventures with More Secure Projects

question 81

Essay

A firm that offsets risky ventures with more secure projects or new development ventures with existing product line cash cows is desirous of ________.


Definitions:

Expected Return

The anticipated return on an investment, taking into account the probabilities of each possible outcome.

Independent

Free from external control and constraint, or in finance, referring to analysis or advice that is unbiased by conflicts of interest.

Negatively Correlated

Negatively correlated refers to two variables moving in opposite directions; as one increases, the other decreases, and vice versa.

Standard Deviations of Returns

A measure of the volatility or risk associated with the return on investment, indicating how much the returns can fluctuate over a period.

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