Why a risk taker (likes to take risk) type of investor prefer equities over fixed income?

Q: How is the risk-adjusted discount-rate approach more commonly practiced in the real world?

A: Risk adjusted discount rate approach is an approach which is used in assessment of various long-term…

Q: How do banks assess the risk appetite of each customer in terms of choosing the right investment?

A: Risk appetite is the ability to absorb or undertake a level of investment risk by the investor. This…

Q: How might the incentive fee of a hedge fund affect the manager’s proclivity to take on high-risk…

A: Under portfolio fund, manager earns management fee and incentive fee. Manager incentive fee is also…

Q: Explain the Opportunistic Investing strategies?

A: Opportunistic investing strategies are strategies that involve investment in highly risky…

Q: risk-taker (likes to take risks) type of investor prefer equities over fixed income?

A: Most of investors invest in the equity and like to take high risk and would invest in stock market.

Q: Using a payback period rule tends to bias investors toward Select one: a. riskier investments. b.…

A: Payback period: This method is used to calculate how many years a project will take to recover its…

Q: What is the difference between inside view and outside view in investing? Give a scenario where they…

A: Inside View in investing comes from the individual own experience of investing and they actively…

Q: Explain to the investor what an ETF is. What are the advantages and disadvantages of investing in an…

A: Exchange-Traded Funds are known for being traded like a single stock on stock exchanges at a price…

Q: What are some advantages and disadvantages of top-down versus bottom-up investing styles?

A: Top-down investing and bottom up investing procedures are the procedures used in different type of…

Q: How would the risk premium work out for a riskier investment?

A: A risk premium is a return on venture over the hazard free rate a financial specialist requires to…

Q: What is the difference between outside view and inside view in investing?

A: Behavioral finance is a concept in which invetsment decisions are made by the investors based on the…

Q: o risk premiums influence financial decisions regarding risk and re

A: Step 1 A risk premium is an investment return that is expected to generate more than the level of a…

Q: Which of the investors are known for taking the higher investment risk? O Common Stock holders Bond…

A: Investment risk is the risk that the amount invested is likely to decline in value or not give as…

Q: Would a market-neutral hedge fund be a good candidate for an investor’s entire retirement portfolio?…

A: The investment options available to an investor which uses various strategies to generate revenues…

Q: What is the causes of the financial risk?

A: financial risk - financial risk is the possible danger of losing money from an investment made by…

Q: When would individual equity securities be a better choice over ETFs for a risk adverse investor?…

A: There are various alternatives available for investment. Equity security and ETFs are also an…

Q: will you suggest to a relative, to invest in a low risk outlet such as the money market or to a high…

A: In this we have to choose between the debt and equity and choose the proper based on our risk…

Q: What is the compensation for price risk in finance? How do they arise and what issues arise due to…

A: Price risk: Price risk can be defined as the risk that price of a security may reduce. This risk is…

Q: What is risk aversion, and how is risk aversion related to the expected return on a stock

A: In the world of investment, the risk appetite of the investor is an important consideration when…

Q: When it comes to investment performance, what statistical notion do many portfolio managers employ…

A: Investment performance refers to money that a person or organization earns from a particular…

Q: Explain the Contrarian Investing Strategy?

A: An investment strategy is a procedure to select the best investment portfolio that gives the maximum…

Q: What is definitions of this?   Systematic risk  Risk free rate of return  Market rate of…

A: Capital asset pricing model (CAPM) can be used to compute the return expected by the investors by…

Q: Describe the SML in words.  What is it saying about how investors form required rates of return?…

A: This question talks about Security Market Line (SML) and its implications on.Security Market Line is…

Q: How does the diversification of an investor’s portfolio avoid risk?

A: Portfolio investments mean investments in the group of assets, securities, bonds, etc. Investments…

Q: Both investors and gamblers take on risk. The difference between an investor and a gambler is that…

A:

Q: How can an investor eliminate Unsystematic Risk?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk. Systematic risk is non…

Q: steps that you would take to mitigate the risk of interest rate risk

A: The important steps in mitigating interest rate risks are as follows: Diversification: One of the…

Q: Which of the following is NOT a principle of finance? Select one: O a. company advantage O b.…

A: Finance can be referred to as the study of the allocation of assets and liabilities as per the risk…

Q: estment with higher risk, regardless to the return then he is following a strategy. O a. risk-aware…

A: Here, it is required to identify the correct option.

Q: When would individual equity securities be a better choice over ETFs for a risk adverse investor?…

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: Explain Comparing Risk Premiums?

A: Risk premium is additional premium an investor achieves by investing in a riskier financial…

Q: of investor prefer fixed income

A: Risk-Averse-: Some investor who is a Risk-Averse has the trait of inclining toward preventing loss…

Q: Explain what is meant Market Risk and by Specific risk. How can an investor reduce these risks?

A: Risk is referred to as the chance that an outcome or an investment's actual gains will differ from…

Q: How does the risk return trade-off relate to the financial manager's main goal?

A: The main goal for a financial manager is to generate the maximum value of the firm to its owners.…

Q: Differentiate among the three basic risk preferences: risk-indifferent, risk-averse, and…

A: Risk: It refers to uncertainty arises in the event of doing any transaction. The outcome of your…

Q: “When the stock market rises, investment spending isincreasing.” Is this statement true, false, or…

A: When the stock market rises, investment spending isincreasing. false

Q: The risk-adjusted discount rate reduces investment. True or false?

A: The estimation of the present value of cash for high-risk investment is known as a risk-adjusted…

Q: How you can explain that the stockholders are receiving an adequate return on their investment?…

A: Adequacy of return In simple words, return on equity can be defined as the amount of dividends that…

Q: Investor who wish to take high risk would invest his money in:

A: Investors willing to take high risk would invest their money in assets with highest amount of risk.…

Q: Why are investors risk-averse? How can investors deal with different degrees of risk?

A: In the world of investment, the risk is price volatility. A volatile investment may either make you…

Q: The fisher effect primarily emphasizes the effects of on an investor's rate of return

A: The fisher effect states that: Long term nominal interest rate  = real interest rate + expected…

Q: What is the importance of market risk premium?

A: Market risk premium Variance of the market return and the risk-free rate. It depicts the equity…

Q: discuss the advantages and disadvantages of options in the financial market

A: Options are financial instruments which derives its value from an underlying asset. The buyer of the…

Q: What statistical concept do many portfolio managers use to represent a risk when considering…

A: The return an individual or organisation gets from any investment portfolio is termed as investment…