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Q: What does cost of risk consist of?
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Does risk considered cost?

Risk is considered a cost of any type of business or action in life. Often risk may have a great cost but the rewards associated with taken this risk can be even greater.


Is risk insurance and risk insurance management are same?

According to my opinion or my experience risk insurance and risk insurance management are differ from each other. Risk Insurance is the risk that is insured Risk Insurance Management Consist of process How the Risk can be manage it include prevention of risk and minimization of risk and many other proces.


Why does causes cost of capital increase?

element of risk is the factor which causes the cost of capital to increase as much the risk as much the cost of capital.


What does the drug category A for pregnancy consist of?

Category A: Controlled human studies have demonstrated no fetal risk.


What is the difference between risk and exposure?

An exposure consist of the potential financial effect of an event multiplied by its probability of occurrence and risk is with probability of occurrence. Thus an exposure is a risk times its financial consequences.


How much did it cost for a 4x440ml Stella Artios in 1997?

What did the first computer consist of?


Advantages Cost and Risk of Database Approach?

The advantages of Cost and Risk Database Approach include being personalized and specialized. It also involves conversion costs and management cost.


What is the cost of workman's comp on a family owned business?

It depends on the risk factor of your business, usually lower cost for lower risk, higher cost for higher risk, your best bet is to contact several insurance companies for various quotes.


What type acceptable in the risk management process?

A necessary risk with benefits that outweight the cost.


How Indian companies running a risk by not giving attention to cost cutting?

1. Is Indian companies running a risk by not giving attention to cost cutting?


Suppose a firm estimates its cost of capital for the coming year to be 10 What are the reasonable cost of capital for an average risk project high risk and low risk?

In order to determine reasonable costs of capital for average, high and low risk projects the firm should develop risk-adjusted costs of capital for each category of risk based on the concept of divisional WACC. If a firm estimates that its cost of capital for the coming year will be 10%, the firm should use 10% as the basis for its average risk projects since the firm will need to achieve a minimum of a 10% return on all its projects. Typically, a high-risk project has the potential for higher returns and a low-risk project will typically yield lower returns. Therefore, the firm could set the cost of capital for its high-risk projects at 12% and the cost of capital for low risk projects at 8%. Since the average risk project has a 10% cost of capital, the overall risk of the firms projects will be equal to the 10% cost of capital. Similarly, if the firm's high-risk projects are particularly risky, they could be set at a 15% cost of capital and the low-risk projects will be adjusted down to a 5% cost of capital. The ultimate goal is that the portfolio of the firm's projects will achieve the required 10% return or greater so that the cost of capital to fund the projects is covered. The assignment of risk is somewhat subjective but it is better than not adjusting the risk at all.


Differntiate between prime cost and factory cost?

Prime cost is a subset of Factory cost. Prime cost consist of Direct material, Direct labour and Direct expenses. Factory cost = Prime cost + Production OH