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The ________ Is a Measure of Relative Dispersion Used in Comparing

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The ________ is a measure of relative dispersion used in comparing the risk of assets with differing expected returns.


Definitions:

Profitability Index

A calculation that measures the profitability of an investment, determined by dividing the present value of future cash flows by the initial investment cost.

NPV Ranking

A method of evaluating investment opportunities by ranking them based on their Net Present Value, which estimates the present value of future cash flows minus initial investments.

IRR Ranking

The process of ordering investments or projects by their Internal Rate of Return, which estimates profitability.

Discounted Cash Flow

A financial analysis method that estimates the value of an investment based on its expected future cash flows, discounted to their present value.

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