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Suppose That You Are About to Start a New Business

question 18

Essay

Suppose that you are about to start a new business: You will provide consulting services for those who want to launch their own web-sites. What major decisions based on the subject matter of engineering economics should be made before you set up your business activities?


Definitions:

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government bonds.

Standard Deviation

Square root of the variance.

Alpha

In investing, alpha is a measure of the performance of an investment relative to a suitable benchmark index, indicating excess or deficient return.

Security

A financial instrument representing ownership in a publicly-traded corporation (stock), a creditor relationship with a government or corporation (bond), or rights to ownership as represented by an option.

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