What are the trade-offs to consider in terms of risk and return when considering investing in stocks versus bonds?
There exists a risk-return trade off while investing money in money market funds like stocks or bonds.
While stocks represent ownership in an organization, bonds are long term debt issued to organization
Stocks: High return but high risk
Bonds: Low return but low risk
Thus, bonds are more safer than stocks because they gaurantee a fixed return of principal amount, unlike stocks whose returns are dependent on issue of dividends.
What are the trade-offs to consider in terms of risk and return when considering investing in...
What are the trade-offs that farmers must consider when building supply chain competencies. This is a three paragraph question for 10 marks. Please help.
What trade-offs exist during life history of marine organisms, or when is it adaptive to swim or orient with laminar versus turbulent flow?
1)An investor is considering investing an equally weighed portfolio of two (2) stocks namely X and Y. You have been given the following information about these two stocks in terms of risk, return and correlation, as shown below: 2)Based on this calculate a) portfolio return b) portfolio risk c.)Compare portfolio risk with the individual stock risks and identify the benefit of the diversification of the portfolio. Stock X Y E(R) 10% 8% σ 20% 15% Correlation between A and B...
You are considering investing in two stocks to form a portfolio. You are very risk averse (you do not like risk). Which one of the following stock combinations will you choose for your portfolio (these are your only options)? Stocks A & B which have a correlation coefficient of +1.0. Stocks C & D which have correlation coefficient of -0.6. Stocks G & H which both have a beta of 2.0. Stocks E & F which have a correlation coefficient...
Discuss trade-offs that may be required when managing the triple constraint. What element(s) of the triple constraint typically take priority in your organization? Why? Project Management
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk and Rates of Return: Risk in Portfolio Context The capital asset pricing model (CAPM) explains how risk should be considered when stocks and other assets are held . The CAPM states that any stock's required rate of return is the risk-free rate of return plus a risk premium that reflects only the risk remaining diversification. Most individuals hold stocks in portfolios. The risk of a stock held in...
You are a risk-averse investor who is considering investing in one of two economies. In the first economy, all stocks move together - in good times all prices rise together and in bad times they all fall together. In the second economy, stock returns are independent - one stock increasing in price has no effect on the prices of other stocks. Which economy would you choose to invest in? Explain.
What are the assumptions of life history theory? What are trade-offs and why are they thought to occur in nature? Use examples with graphs from class or your book to illustrate your points and provide examples of trade-offs. please answer question with 4-5 sentences of substantive well thought out answers. Thanks!
Two stocks have the following profile. Which stock offers a better risk return trade off (less risk per unit of return)? ABC XYZ Standard Deviation Coefficient of Variation (CV) 30% 1 20% 1.5)
Identify and discuss briefly what you think are the major trade-offs that firms face as they think about offshoring and reshoring. When substantial layoffs are involved, what are firms’ responsibilities to their employees and their communities?