Discuss How Qualitative Methods Can Be Used to Try to Avoid

question 19

Essay

Discuss how qualitative methods can be used to try to avoid or alleviate the pitfalls identified above in essay number 5.

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Definitions:

Risk-Free Rate

A hypothetic return rate on a risk-free investment, usually shown by the returns on government securities.

Expected Return

The weighted average of all possible returns from an investment, accounting for the likelihood of each outcome.

Standard Deviation

Standard Deviation measures the amount of variation or dispersion from the average, indicating the risk associated with a variable.

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, typically within a year.