Equity risk

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Revision as of 22:04, 29 October 2016 by imported>Doug Williamson (Expand.)
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1.

The variability of returns to equity investors, often measured by the standard deviation of equity returns.

In the Capital asset pricing model, total equity risk is driven both by (i) the underlying business risk and (ii) by the additional financial risk resulting from the level of debt in the firm’s financial structure.


2.

The risk of losses on direct equity investments (shareholdings) or on other equity-linked positions.


See also