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Risk and Return

In: Capital and Colonialism

Author

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  • Klas Rönnbäck

    (University of Gothenburg)

  • Oskar Broberg

    (University of Gothenburg)

Abstract

The aim of this chapter is to use the risk/return relationship to broaden the picture of the financial axis between the London financial market and Africa during our period of study. We use two central concepts in the analysis of financial risk—volatility and equity risk premium—to put our return estimates in context. We move on to analyse the relationship between the companies’ longevity in our sample and the return on investment. Our results show that investing in Africa was somewhat riskier than investing in the United Kingdom, which on an aggregate level corresponds with a somewhat elevated return on investment. Disaggregating the data by region in Africa at the same time shows that many investors were unable to receive a premium for the increased risk they faced.

Suggested Citation

  • Klas Rönnbäck & Oskar Broberg, 2019. "Risk and Return," Palgrave Studies in Economic History, in: Capital and Colonialism, chapter 7, pages 125-144, Palgrave Macmillan.
    • Handle: RePEc:pal:palscp:978-3-030-19711-7_7
    DOI: 10.1007/978-3-030-19711-7_7
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