Question

Difference between risk adjusted discount rate and certainty equivalent method

Answer 1

Risk-adjusted rates lump together the pure time value of money as represented by the risk-free rate and a risk premium: RADR rRF + RRP. On the other hand,
the CE approach keeps risk and the time value of money separate.

Answer 2

Risk adjusted discount rate:

Risk-adjusted discount rate is the rate used in the calculation of the current value of a risky investment, such as the real estate or a firm. In fact, the risk-adjusted discount rate signifies the required return on investment.

Certainty-equivalent method:

It is a method in which indeterminate cash flows are converted into certain cash flows by multiplying with probability of incidence such cash flows.  

Hope it helped..