Explain each of the following FOUR (4) considerations when investing surplus cash:
Risk, Maturity, Liquidity, Return. 

 2
What are the advantages of investing in the common stock rather than the corporate bonds of a company?  Compare the certainty of returns for a bond with those for a common stock.
 3

 Briefly discuss why international diversification reduces portfolio risk. Specifically, why would you expect low correlation in the rates of return for domestic and foreign securities?
 4

Compare the liquidity of an investment in raw land with that of an investment in common stock. Be specific as to why and how the liquidity differs.

Answer rating: 100% (QA)

1 Risk This is a reference to the likelihood that an investment would be a financial loss Investments with greater risk typically have higher potential returns Investors should be aware of their risk ... View the full answer