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The Evaluation of Risk in Business Investment

  • 1st Edition - October 1, 1980
  • Latest edition
  • Author: J.C. Hull
  • Language: English

Provides finance specialists in industry and students of management with a comprehensive set of practical procedures for evaluating the total risk in the major capital investment… Read more

Description

Provides finance specialists in industry and students of management with a comprehensive set of practical procedures for evaluating the total risk in the major capital investment decisions facing a business. It discusses in detail how companies can make effective use of sensitivity analyses, risk simulations and other techniques, and deals in depth with important issues, such as: How should the results of a sensitivity analysis be interpreted?; How can adequate subjective probability distributions be obtained? How can dependencies between variables be dealt with in a practical way?; The emphasis throughout is on 'how to do it' and the reader needs only a slight knowledge of statistics. A particularly important feature of the book is the FORTRAN subroutines in Appendices A and B which the author prepared for calculating risk evaluations

Readership

Operational research and finance specialists in industry, practising managers. Business school courses and postgraduate students of capital budgeting, engineering economics decision analysis, business administration, finance, accounting, and operational research

Table of contents

(partial) The basic principles of investment appraisal

Some procedures for quantifying risk

Forecasting and the assessment of subjective probability distributions

Dealing with dependence in risk simulation

The results from a sensitivity analysis

Sequential investment decisions

Risk and return: some theoretical ideas

Case study

Introducing risk evaluation into an organisation

Appendix A: a computer program for carrying out sensitivity analyses

Appendix B: a computer program for carrying out risk simulations

Appendix C: a sampling scheme for dealing with dependent variables

Product details

  • Edition: 1
  • Latest edition
  • Published: June 28, 2014
  • Language: English

About the author

JH

J.C. Hull

Affiliations and expertise
Cranfield School of Management, UK

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