Question: Explain two ways an investor can reduce risk when purchasing stocks.

Explain two ways an investor can reduce risk when purchasing stocks.

Step by Step Solution

★★★★★

3.26 Rating (152 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Diversifying a portfolio and having a long time horizon are the two best methods for reducing risk ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

667-B-C-F-G-F (2725).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Q:

MidCap Growth and Energy are two portfolios constructed and managed by the Vanguard Group of mutual funds, comprised of stocks of middle-sized U.S. companies and stocks of U.S. energy companies. The...

Q:

LifeStrategy Conservative Growth and Energy are two portfolios constructed and managed by the Vanguard Group of mutual funds, comprised of stocks of conservatively managed U.S. companies and stocks...

Q:

An investor sells a stock short in July and its price declines in Novemberthe position has generated a profit. However, the individual does not want to close the position and realize the profit...

Q:

MGMT-6082 Domestic and International Sourcing Mid Term Case Smart Phone Corporation (25%) Individual Submission (60%) Students are to submit their individual preparation on the Mid Term Case 72 hours...

Q:

please answer questions as detail as possible. QUESTION 1 Use the information in the table below to help design an appropriate hedging strategy for Lunar Airlines Ltd under the following conditions...

Q:

Please analysis the case study must including identification of issues, situational analysis, identification of recommendations, financial risk analysis, total cost analysis, supplier evaluation and...

Q:

28. Which of the following will reduce the required return on an investment? a. an increase in beta and a reduction in the Treasury bill rate b. an increase in the Treasury bill rate and a decrease...

Q:

For this assignment, you will choose two companies operating in the same industry. For example, Ross and TJ Maxx. You will answer the following: Perform FIVE (5) ratio analyses for the recent two...

Q:

Assessing Company Financial Performance Perform a Comparative Ratio Analysis on the two companies- The Home Depot, Inc. and Lowes Companies Inc. Perform five (5) ratio analyses for 2023s audited year...

Q:

Assessing Company Financial Performance Choose two companies operating in the same industry and answer the following: 1. Perform five (5) ratio analyses for the last audited years financial...

Q:

Joe and hisfiance Sandra reside in the same home. Both Joe and Sandra work and share living expenses. Sandra's 20-year-old son Bobby lives with Joe and Sandra. Bobby, cannot be claimed as dependent...

Q:

5 hearts? Refer to the description of a standard deck of 52 cards and Figure 4 on page 363. An experiment consists of dealing 5 cards from a standard 52-card deck. In Problem, what is the probability...

Q:

plz answer Draw the output of the following code. Your drawing should clearly show the dimensions, colors, and all CSS properties applied. This is an example of your submission. You can draw it by...

Q:

In Figure 15-2, suppose that the initial profit is $1 per unit of inducement (m = 1). Suppose then, that increased competition lowers m from 1 to 0.5. (a) Draw the new profit line p = mQo + mI. (b)...

Q:

The T. P. Jarmon Company manufactures and sells a line of exclusive sportswear. The firm's sales were $600,000 for the year just ended, and its total assets exceeded $400,000. The company was started...

Q:

Apex Fabricating, Inc., manufactures fenders and other after-market body panels for older automobiles. At the close of last year, the firm had $10,381,800 in current assets and $4,152,720 in current...

Q:

The liabilities and stockholders' equity for Campbell Industries are as follows: Accounts payable .............................................. $ 500,000 Notes payable...

Q:

Last year Carson Industries issued a 1 0 - year, 1 4 % semiannual coupon bond at its par value of $ 1 , 0 0 0 . Currently, the bond can be called in 6 years at a price of $ 1 , 0 7 0 and it sells for...

Q:

You are making forecasts for two securities that promise perpetual, growing annual cash flows. For both securities , calculate the cash flow you can expect at the end of year 7 ( that is , seven...

Q:

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 - $50 - $100 Year 1 $27 $19 Year 2 $21 Year 3 $22 $49 Year 4 $15...