This tender seeks to establish the costs faced by a rational investor
in relation to a best new entrant peaking plant for the purposes of determining the Annual Capacity Payment Sum in the CPM for the Trading Year 2016.
If some of these projects are delivering a return which is for the same risk profile, which is below conventional projects, then every rational investor
wouldn't touch a green project.
A rational investor
will only ever have a portfolio which lies somewhere on this frontier.
These undertakings will be sought from those clients whose transactions have been observed to be suspicious or prima facie inconsistent with the behaviour of a rational investor
," a Sebi spokesperson told M AIL T ODAY .
Nevertheless, like any rational investor
, Agyare is mindful of the downside, the risks involved - and for Ghana, in the short term, they are about the forthcoming elections in December this year.
In his seminal work, Yaari (1965) shows that a rational investor
faced with two distinct choices--financial assets and annuity assets--will only purchase annuities.
In fact, a rational investor
will choose Asset A only if P(A / Ht, s)-pt > 0.
A rational investor
should look not just at the risk of Stock A but the effect of adding Stock A on overall portfolio risk.
The lesson: for a rational investor
who thinks in terms of the business behind the stock, the best time to buy is when it is available at a deep discount to its value.
Having taken into consideration the relative risk of making an investment into a particular business compared to investing the same money into a low risk, guaranteed return investment such as government bonds, the WACC represents the return or yield a rational investor
would reasonably expect to receive when investing money in that business.
Required Rate of Return: Return that the rational investor
requires based on perceived risk of a particular investment.
Several areas must be considered before a rational investor
would consider purchasing an emerging European investment.