Investments. Methods for assessing investment risks (the most important)

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Investments. Methods for assessing investment risks (the most important)

Lecture notes, cheat sheets

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METHODS FOR ASSESSING INVESTMENT RISKS

Statistical analysis - the level of risk is measured by two criteria: the average expected value (variance) and the variability (variation) of the possible result. Dispersion measures the possible average outcome, variation shows the measure or degree of deviation of the expected average from the actual average. Factor analysis of financial risks. The coefficients of business activity and financial stability are calculated, and the probability of bankruptcy is determined.

Method of expert assessments - here comparative characteristics of the level of risk are compiled, ratings are determined, analytical expert reviews are prepared.

Economic-mathematical modeling - a selection of criteria (target function) and factors (system of restrictions) is made, related to the strategic goal of the issuer or investor carrying out the modeling, the main thing is to make the right choice of model based on the situation. It is the models that make it possible to predict a specific situation and assess the possible probability of financial risk.

The method of socio-economic experiment is to conduct individual experiments on typical financial situations. Its disadvantages are the atypical nature of many financial situations, which makes it difficult to extend conclusions to many specific cases of the financial life of an enterprise.

analogy method. Specialists, financial managers, on the basis of publications or the practice of other enterprises, evaluate the likelihood of certain events, obtaining a specific financial result, and the degree of financial risk. It must be taken into account that each enterprise has a large number of peculiarities inherent in it alone in terms of personnel, raw materials, industry character. Risk assessment is based on a combination of scientific methods and intuition of experts and analysts. It is based on taking into account a large number of conflicting factors, the use of various theoretical approaches and knowledge of practice precedents. Systematic risk is accurately predicted by fundamental market research methods. Market analysis involves tracking the current state of the market and forecasting its development. Observation, evaluation and identification of market development trends are united by the concept of "monitoring".

Fundamental methods are used in long-term forecasting and are based on the analysis of a set of macroeconomic indicators. They are developed and used by market forecasting services created at research institutes and universities, commodity and stock exchanges.

Author: Kuznetsova S.A.

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