• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Risk discount rate (RDR)

D

dChetty

Member
a)RDR= risk-free rate+ margin for risk. How does RDR relate to the investment return? That is the i in (Premiums-Expenses)*(1+i).
b)Why do shareholders require a high RDR?
c)Is RDR used to determine the VIF and present value of share price?
 
RDR can be viewed in different ways; but one way is to think of of it as return required by the shareholders, as opposed to your i which is the return expected on your assets.
b. the more profit the better - compensation for tying up capital and taking risk
c. can be - but will have different RDRs for different purposes (and many ways to value a share price)
 
You must log in or register to reply here.
Back
Top