Risk premium and Scenario analysis: Difference between pages

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imported>Doug Williamson
(Create the page. Source: IFRS 13, page A631.)
 
imported>Doug Williamson
(Removed broken link to Will Spinney article)
 
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For financial reporting and fair valuation purposes, risk premium is  defined as compensation sought by risk-averse market participants for bearing the uncertainty inherent in the cash flows of an asset or a liability.
A process of analysing possible future events by considering a number of different potential outcomes.


The different scenarios under analysis can involve changing more than one input simultaneously.


This is a similar concept to market risk premium in the Capital asset pricing model.


== See also ==
* [[Back test]]
* [[Model]]
* [[Sensitivity analysis]]
* [[Stress test]]


== See also ==
[[Category:Corporate_financial_management]]
*[[Fair value]]
[[Category:Financial_risk_management]]
*[[IFRS 13]]
*[[Market participant]]
*[[Market risk premium]]
*[[Capital asset pricing model]]

Revision as of 14:07, 17 May 2017

A process of analysing possible future events by considering a number of different potential outcomes.

The different scenarios under analysis can involve changing more than one input simultaneously.


See also