A broker has advised you not to invest in technology stocks because they have high standard deviations.

Question:

A broker has advised you not to invest in technology stocks because they have high standard deviations. Is the broker’s advice sound for a risk-averse investor like yourself?

Why or why not?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

See More Books

Question Posted: Feb 22, 2024 03:01 AM

See More Questions

A broker has advised you not to invest in oil industry stocks because they have high standard deviations. Is the brokers advice sound for a risk-averse investor like yourself? Why or why not?
Mrs. B, recently widowed and in her mid to late 40s, is a senior executive working for a Singapore-based multi-national corporation with SGD 10 billion in global sales. She has a son aged 20 and a...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
On January 1, 20X7, CP Co. (a Canadian company) purchased 80% of SF Co. (a U.S. company) at a cost of US$50,000. The book values of SF's net assets were equal to their fair market values on this date...
Evaluate the composition of the Steering Committee. Do you feel it has adequate representation? Explain. What do you think its role should be in the project? Is its charge clear?
Of what value is the schedule of cost of goods manufactured? How does it tie into the statement of profit or loss?
Explain when it is appropriate to use a randomized block design.
An advocate of discounted cash flow analysis says, "Residual earnings valuation does not work well for companies like Coca-Cola, Cisco Systems, or Merck, which have substantial assets, like brands,...
Basic on the provided graph and Link. Please explain: 1. What do you think most people will notice first in the graph? 2. If the graph was easy or hard to understand, why? 3. Suggest one change to...
An equity has a beta of 0.9 and an expected return of 9 per cent. A risk-free asset currently earns 2 per cent. (a) What is the expected return on a portfolio that is equally invested in the two...
Explain what is meant by short selling. When is short selling profitable?
Write a quadratic function in general form that has the given zeros, and leading coefficient of 1. a. x = -3 and x = 5 b. x = -3.5 (double root) c. x = 5i and x = -5i d. x = 2 + i and x = 2 - i
Data source and calculation necessary to find the risk-free rate 5-year of Spain. What is the value that should be used for the WACC?
Prove that if probability distribution A dominates probability distribution B in the SOSD sense and both probability distributions have the same mean, then probability distribution A has a lower...
P/E ratio = 10 assumption market value = -0.5 P/E ratio = 20 assumption market value = -1 Actual Share Price = 3.3 Compare the actual share price of the company with TWO assumption market value per...
How and why do Kellogg and General Mills, the competitor differ in their risk, and how that translates into Moody's/S&P credit ratings? Analysis based on a data for 2021 and 2020.
Explain why payment, loan balance, lender's yield, effective borrowing cost and present value are the five important qualities or measures that are important mortgage loan analytics?
Statement of Cash Flows Using a Work SheetIndirect Method Refer to all of the facts in Problem 12-6. Required 1. Using the format in the chapters appendix, prepare a statement of cash flows work...
Does log 81 (2401) = log 3 (7)? Verify the claim algebraically.
Crecimiento S.A. currently plows back 40 percent of its earnings and earns a return of 20 percent on this investment. The dividend yield on the stock is 4 percent. a. Assuming that Crecimiento can...
Vega Motor Corporation has pulled off a miraculous recovery. Four years ago, it was near bankruptcy. Now its charismatic leader, a corporate folk hero, may run for president. Vega has just announced...
P/E ratios reported in The Wall Street Journal use the latest closing prices and the last 12 months reported earnings per share. Explain why the corresponding earningsprice ratios (the reciprocals of...
What are the different types of visual aids that can be used in public speaking, and why are they effective?
What are the types of sources that can be used in public speaking, and what instances (e.g., type of speech, target audience) is each source type appropriate,what is the reasoning for using each type?
Identify and analyze specific ethical problem in your current or past organization. Pick a problem of manageable size. The nature of the ethical problem is up to you but make sure there is an ethical...

A broker has advised you not to invest in technology stocks because they have high standard deviations.

Question:

Step by Step Answer:

The brokers advice is based on the observation that technology stocks have high standard deviations ...View the full answer

Corporate Finance

Students also viewed these Business questions