List and Explain the Five Types of Perceived Risk

question 10

Essay

List and explain the five types of perceived risk.

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Definitions:

Treynor Measures

A performance metric that assesses the returns earned on a portfolio in excess of the risk-free rate, adjusted for market risk.

Sharpe

A ratio used to calculate the risk-adjusted return of an investment, comparing the excess return of the investment to its standard deviation of returns.

Jensen Portfolio Performance Measures

A performance measurement method that evaluates the risk-adjusted return of an investment portfolio by comparing it to the expected return.

Investment Scenario

A projection or model of potential financial outcomes based on specified conditions or assumptions.