Compare and Contrast the Three Ethical Principles Put Forth in the Belmont

question 105

Essay

Compare and contrast the three ethical principles put forth in the Belmont Report.

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Definitions:

Certainty Equivalent Approach

A financial analysis method that adjusts uncertain cash flows to reflect the risk-free cash flow an investor would accept in place of taking a risk.

Cost Of Capital

The earnings rate a firm must achieve on its investment endeavors to preserve its market value and draw in capital.

Discount Rate

In discounted cash flow analysis, it's the rate of interest used to determine today's value of cash flows expected in the future.

Certainty Equivalent Approach

A method used in capital budgeting and investment finance that adjusts the future cash flows of risky investments to reflect their riskiness as compared to a certain cash flow.