The average expected value of your venture, in turn, is $10 million x 10% plus $5 million x 40% plus $0 x 50%, or $3 million. So, it’d be statistically better for you to say goodbye to your boss ...

Downside risk refers to the potential for an investment to decrease in value. Unlike general risk, which considers both upward and downward price movements, downside risk focuses solely on the ...

Downside risk refers to the potential for an investment to decrease in value. Unlike general risk, which considers both upward and downward price movements, downside risk focuses solely on the ...

Learn what Value at Risk is, what it indicates about a portfolio, its pros and cons, and how to calculate the VaR of a portfolio using Microsoft Excel.

For example, if you calculate your portfolio's beta to be 1.3, the three-month Treasury bill yields 0.02% as of October of 2015, and the expected market return is 8%, then we can use the formula ...

You may have already used Microsoft Excel spreadsheets to calculate the expected rate of return. If so, simply use the value in that cell to represent the expected return in the risk premium formula.

Estimate the expected risk-free rate of return. Calculate the yield to maturity on 10-year Treasury Inflation Protected Securities (TIPS), as these securities adjust their yield to match inflation.

There may be more value abroad for certain sectors of the market, as I calculated returns to be around 10.25 percent expected for Japanese equities. Other markets can have even better returns but ...

If the risk-free rate is 0.5%, inflation is estimated to be 2.5%, and the bond's liquidity and maturity premiums are both 1%, adding all of these together produces a total of 5%.