INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Question
Chapter 28, Problem 8CP
A
Summary Introduction
To explain: The risk objective of investment policy.
Introduction: The objective of risk management policy is to provide funds with a higher amount according to the interest rate but after a long period of time. Here, in this case, the time period is 18 years and the rate is 40%.
B
Summary Introduction
To explain: Pretax rate for the investment policy.
Introduction: While evaluating the risk a large amount of investment is required and put that amount into risk for a long period but after time it gives a long return.
C
Summary Introduction
To explain: All the constraints of investment policy.
Introduction: Constrains are time horizon, liquidity requirements, tax concern and unique circumstances. Out of these constrains tax concern and unique circumstances are profitable.
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