Dealing with Risk in Investment Decisions
讨论投资决策中如何考虑风险，指出投资者不仅要看项目的净现值，还要评估其在不同经济条件下的风险，高风险要求高回报。
Climbers on Everest are said to take 'calculated risks'. They reduce the chance of failure by rigorous training. They use the best equipment, plan their expeditions to a fine degree, attempt only viable, if dangerous, routes on the mountain and climb only in acceptable weather conditions. When they have reduced risk to an acceptable level, they proceed with their venture. Most of us prefer the lower slopes; the satisfaction is not so great, but neither is the risk. Although the relationship between reward and risk was introduced in Chapters 1 and 2, when we considered investment appraisal in Chapter 3 we unrealistically assumed that future cash flows are known with certainty. Now this may be so with a fixed-interest government security, but it certainly will not be the case with a speculative goldmining operation. Investors should therefore consider not only the net present value (NPV) of a project, but also the risk that its NPV could vary according to the economic conditions prevailing at the time of the operations. People who subject their capital to high risk will expect high rewards.KeywordsCash FlowInvestment DecisionRisk PremiumEfficient FrontierIndifference CurveThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.