Why is it a bad idea in investing in just one investment
Q: Biases and attitudes of investors and their anomalous behaviors inconsistent with traditional…
A: In finance, the financial experts study the publically available securities information, financial…
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: what better to suggest in terms of investing, to invest in a low risk outlet such as the money…
A: To answer the above question one needs to understand what is a low-risk outlet and what is a…
Q: ing process, and hence investment markets are efficient, reflecting all available information in…
A: There are many theories in the finance which explain the behavior of investors and the market.
Q: What is the typical reason why investors would choose to put their money into an investment with…
A: Risk and return are directly proportional. Higher the risk, higher the return expected. Lower the…
Q: to advice a relative or a close friend in terms of investment, what is the best suggest to invest in…
A: There are two types of instruments- one is the money market instrument and other is capital market…
Q: What is risk? Although many risks (e.g., career risk, risk of how many children to have and whether…
A: The risk may be defined as the possibility of uncertain events that can be harmful to the…
Q: Is it reasonable to ignore IDIOSYNCRATIC RISK and care only about MARKET (SYSTEMIC) risk? What about…
A: Definitions Idiosyncratic risk : In simple words, idiosyncratic risk can be understood as the risk…
Q: Does a greater risk imply a bad investment?
A: Risk is the degree of uncertainty about the expected return from an investment. It is the…
Q: Is the following statement true or false. Briefly explain your answer. é fe̟s cm "There can not be a…
A: Risk free asset is an asset in which the return from the asset is guaranteed because of the…
Q: Why a risk taker (likes to take risk) type of investor prefer equities over fixed income?
A: Risk takers are the individuals who are willing to take risk besides the consequences comes with it.…
Q: The maln rule In Investing Is: Select one: O a. don't invest unless the percelved risk is high…
A: Investor should consider various aspects before investing in any security or portfolio. Some of the…
Q: What type of mutual funds would not be good for long-term investors? Can you find a specific one and…
A: Mutual funds are an investment alternative under which funds from different investors are…
Q: Why is it important to understand your risk tolerance before you start investing?
A: Before making investments, it is important to consider two things – risk and return. Before…
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: Is there an arbitrage opportunity? Explain. Calculate the risk premium interest rate that will…
A: Arbitrage opportunity arises when there exists a difference between the prices of similar item in…
Q: Explain why it's possible for tranching to make invest ing in a mortgage -backed security more risky…
A: A mortgage-backed security is a type of security which is backed up by mortgage meaning failing to…
Q: Exchange-traded funds are popular investments that are easy to sell and have the potential to earn…
A: Exchange-traded funds are those that offer comparable risk and return and track a certain exchange…
Q: An investment computed at compound interest is always a better option than an investment computed at…
A: Simple interest is based on the principal amount of an investment. Compound interest is based on…
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: Hedging is a risk management strategy that is used in limiting or offsetting probability of loss…
A: Financial risk managers analyse the market trend and accordingly take financial decisions. Roles and…
Q: Which of the following statements is TRUE about risk-free investment? a. Return in risk-free…
A: Risk free investment is an investment which gives low consistent returns and is a safe, secure…
Q: How is your borrowing power affected when you are considered a "low risk"? There is a good chance…
A: A low risk individual has a better credit history and higher credit score. This is due to better…
Q: Both investors and gamblers take on risk. The difference between an investor and a gambler is that…
A:
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: ld I manage my portfolio's risk in the current financial environment (Ex: COVID-19, inflation,…
A: Today we are living in the highly uncertain and volatile and inflationary environment where the…
Q: The value of an investment can be defined in numerous ways. Which is FALSE? a. It is the value…
A: There are many different types valuation method of the investment some depends on the cash flow or…
Q: Given that higher-risk investments, such as small-company stocks, have outperformed other…
A: It is first important to understand the objective of investment in different asset classes and…
Q: Can the actual real rate of interest be negative? When ? Can the expected real rate be negative?
A: Yes, the actual real interest rate can be negative. This can happen when the actual inflation rate…
Q: Describe an investment strategy that tries to grow money. You can only use for the description terms…
A: Investment Strategy means the out the group of the rules, procedures, or principles which are…
Q: Which of the following is not true with Money Market? Select one: O a. Deals in short term funds b.…
A: The money market is a type of financial market that deals with near-term instruments.
Q: When you have a fixed investment horizon, it is important to maximize your earnings. You must…
A: An investor should take into consideration the risk and return associated with the security while…
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: How can an investor eliminate Systematic risk?
A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk
Q: portant topic that usually only economists observe.
A: Basically, risk the executives happens when an investor or fund manager investigates and endeavors…
Q: Which of the following statements is true? Multiple Choice When NPV is 0, the IRR is equal to…
A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…
Q: What does it mean to say that an investor is risk-averse? Select one: a. The greater the return…
A: The investor would invest in government bonds but would never invest in the share market.
Q: Which of the following about Treasuy inflation protected securities is NOT true:
A: A treasury inflation protected security is one which protects the investor from rising inflation.…
Q: a. It is not possible to invest to the right of the optimal risky portfolio b. Borrow and invest in…
A: The capital market line is the capital allocation line formed when the risky asset is a market…
Q: Why is it reasonable to ignore diversifiable risk and care only about nondiversififiable risk? What…
A: Diversifiable risk is that risk that can be easily diversified by making the investment into…
Q: What does it mean about credit risk has a “dark side”?
A: Credit risk is the possibility of loss or failure of payment of the loan by the borrower.…
Q: what better to suggest in investing, to invest in a low risk outlet such as the money market or to a…
A: What to invest in will depend on factors like the investment goal of the concerned person, his/her…
Q: Why is it important that in an underwriting the investment banker does not overvalue (overprice) or…
A: Companies/Firms appoint investment bankers as underwriters which provide underwriting service and…
Q: investment banker does not overvalue (over price) or undervalued (under price) the securities? If…
A: It is very important that investment banker should value the securities properly in terms of…
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: When comparing NPV and IRR, which is incorrect? With NPV, the discount rate can be adjusted to take…
A: Net present value is the difference between the present value of cash inflows and cash outflows.…
- Why is it a bad idea in investing in just one investment?
- Discuss the concept of risk return.
- Explain why a non-interest bearing note is effectively an interest-bearing note?
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- what better to suggest in terms of investing, to invest in a low risk outlet such as the money market or to a high risk outlet such as equity?what is a credit risk, market risk and business risk. Give some examples. How can you hedge them?What is not an advantage of a Treasury (T) Note? Select one: a. Extremely liquid security. b. Loss of potential purchasing power (inflation > yield). c. An investor’s capital is secure. d. Better returns than a bank savings account.
- What is meant by the real risk-free rate of interest? Seleccione una: a. The nominal risk-free interest rate, less the expected inflation. b. The rate actually used in the market, not in textbooks. c. The rate quoted on short-term Treasury bills. d. The opportunity cost of foregoing consumption, representing the rate that must be offered to individuals to persuade them to save rather than consume.Interest rate risk is the potential for investment ( ) that result from a change in interest rates. If interest rates ( ) , for instance, the value of a bond or fixed-income instrument will decline.How does interest rate risk differ from reinvestment rate risk? Why is the difference important?
- Explain whether you agree or disagree with the following statement: “The riskless interest rate is the real short-term interest rate that would prevail if there were no transitory financial disturbances.Why is issuing a short-term note receivable an investing activity if it's short term and not long term? Don't investing activities only involve Long-term assets?As an investor now or in the future, what are steps that you would take to mitigate the risk of interest rate risk? Do you believe age and current economic status play a role in how much interest rate risk investors can tolerate?
- Can real interest rates be negative ? Give a simple exampleCan default risks be adequately covered by the choice of a suitably high interest rate compared to the safe rate? Explain your answer.The purpose of the inflation premium is to maintain the purchasing power of money while it is loaned to someone else. TTrueFFalse What kind of problem bad credit risks people pose to financial intermediaries ? AMoral hazard BNone of the above CAdverse Selection DFree-riding
