The Euler (or gradient) allocation technique defines a financial institution's marginal cost of a risk exposure via … calculation of the gradient of a risk measure evaluated at the institution's current portfolio position. The technique, however …, relies on an arbitrary selection of a risk measure. We reverse the sequence of this approach by calculating the marginal …

taken into account when the evaluator does not have a perfectly diversified portfolio (and also cannot obtain one)? 3. Risk … measures. When determining cost of capital and company value, what are the consequences of applying measures of risk other than … simplicity, only a 1-periodmodel (without taxes) is examined. Chapter II shows how the expected values of returns and the risk …