Profitability and Risk of a Financial Transaction

Peter Brusov, Tatiana Filatova and Natali Orekhova
Additional contact information
Peter Brusov: Financial University Moscow
Tatiana Filatova: Financial University Moscow
Natali Orekhova: Financial University Moscow

Chapter 3 in Financial Mathematics, 2024, pp 123-134 from Springer

Abstract: Abstract The chapter “Profitability and Risk of a Financial Transaction” studies the relationship between profitability and risk of a financial transaction. In this regard, the role of uniform and normal distribution is studied, as well as the correlation of financial transactions and methods for reducing the risk of financial transactions, such as diversification and hedging. A formula for profitability for several periods is derived. Situations with complete and partial uncertainty are studied using consequence and risk matrices. The rule of maximizing the expected average profit, the rule of minimizing the expected average risk and the optimal (Pareto) financial transaction, and the Laplace principle of equal probability are described.

Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-031-74668-0_3

Ordering information: This item can be ordered from
http://www.springer.com/9783031746680

DOI: 10.1007/978-3-031-74668-0_3

Access Statistics for this chapter

More chapters in Springer Texts in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().