RETURN VERSUS RISK. EVIDENCE FROM ROMANIA
There should be a strong correlation between return and risk. Tools have been developed in order to assess both the return and risk. Yet, the analysis of risk-return correlation is not easy to perform, as the return usually regards the past performance of the business, while the risk regards the...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Universitatea din Craiova
2015-09-01
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| Series: | Annals of the University of Craiova: Economic Sciences Series |
| Subjects: | |
| Online Access: | http://feaa.ucv.ro/annals/v1_2015/1%20-%20ICOnEC_2015_Circiumaru%20final.pdf |
| Summary: | There should be a strong correlation between return and risk.
Tools have been developed in order to assess both the return and risk.
Yet, the analysis of risk-return correlation is not easy to perform, as the
return usually regards the past performance of the business, while the risk
regards the future. In order to answer these issues, a survey has been
performed in this paper, on nine Romanian companies listed on Bucharest
Stock Exchange. Three score functions have been used in order to assess
the bankruptcy risk (Altman 1968, Conan and Holder, Anghel) and three
ratios of return (return on sales, return on assets, return on equity). The
period analyzed ranged from 2007 to 2013. The research allowed verifying
the assumptions and highlighting the weaknesses of the tools used to
evaluate the risk. |
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| ISSN: | 1843-3723 1223-365X |