Think of a time when you were involved in a transaction in which the above three...

Think of a time when you were involved in a transaction in which the above three attributes of cash flows were important (time, size and risk of cash flows)? Post an example of this experience and include as much detail as possible.

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Expert Solution

I was involved in investment into company known as Reliance for a short term investment for 2 months and I was expecting to gain a return of more than 10% because I have leveraged that money on investment for 8% rate of interest.

So, I was aiming for at 10% rate of return within a short span of time and there was a risk associated with the cash flow because return on equity are not certain and it is just a probability so there was a very high risk and there was absolutely no certainty of the Return and when considered with the size, it was made with $30000.

Eventually during the time period Reliance returned with 30% rate of return and I made a hefty amount as I was still in profits even after paying with levered money so it can be said that higher risk has yielded me with higher return.

jeff jeffy answered 2 years ago

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