How can you reduce risk using diversification technique

Assignment Help Finance Basics
Reference no: EM13262454

What is risk? How do you quantify risk? Discuss different types of risk. In finance literature, it is widely accepted that diversification reduces risk.

How can you reduce risk using diversification technique?

 

Reference no: EM13262454

Questions Cloud

Calculate the width of the central maximum : Light of wavelength 587.5 nm illuminates a slit of width 0.75 mm. Calculate the width of the central maximum
What are the effects of leverage on shareholder wealth : What are the effects of leverage on shareholder wealth and the cost of capital?
Calculate the speed of the hoop : A hoop and a disk, both of 0.48- m radius and 3.0- kg mass, are released from the top of an inclined plane 3.3 m high and 8.3 m long. What is the speed of the hoop
Explain benzene is vaporized at a constant pressure : When 3.00 mol of benzene is vaporized at a constant pressure of 1.00 atm and at its normal boiling point of 80.1 degreesC, 101.8 kJ are absorbed and the P(delta)V for the vaporization process is equal to 8.70 kJ then
How can you reduce risk using diversification technique : What is risk? How do you quantify risk? Discuss different types of risk. In finance literature, it is widely accepted that diversification reduces risk.
What should be the ipo price : Suppose that the risk-free rate is 5%, the company's beta is equal to 2, and the expected market return is equal to 20%. What should be the IPO price (which is equal to the fundamental value of the firm) according to the two stage DDM?
Explain boil water to sterilize it for drinking : When backpacking in the wilderness, hikers often boil water to sterilize it for drinking. Suppose that you are planning a backpacking trip and will need to boil 38L of water for your group.
What should be price of the firm''s stock according to ggm : Suppose that the risk free rate is 5%, the expected market return is 10%, the beta of firm XYZ is 2, the current dividend that XYZ has just paid is 1 and dividends are expected to grow at a rate of 10% per year. What should be the price of the fir..
How long did the acceleration last : A wheel initially rotating at an angular speed of 2.4 rad/s turns through 30 revolutions during the time, How long did the acceleration last

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Determine the term bond valuation

Determine the term Bond valuation and what would this imply about the terms of the issue

  Define variable and fixed cots

For the variable cost, if the Unit price for service is 175 yen each hour justify variable cost associated with price which would with in this case probably only labor expenses.

  Review insurance coverage

The Hammons, Tim (35), Anna (32), children Mary (13) and Mark (11), consider themselves among the typical up and rising middle class. Overall, by today's standards, they have achieved a fair level of success:

  Computing the interest earned for next years

Computing the interest earned for next years wants to invest equally amounts at the end of each year

  Create a table for the npv profile for this project

Create a table for the NPV profile for this project for discount rates ranging from 0% to 30%, in intervals of 5%. For which discount rates is the project attractive?

  Financial modeling and valuation

financial modeling and valuation

  Compute the capital gains yield

Assume an index of small company stocks started in 1946 at 10, and the index level was 1890.59 in 2001. Compute the capital gains yield of the small firm stocks for the period?

  Describing corporate responsibility

Describe how management today has changed from the past, with respect to corporate responsibility and ethics.

  Calculate the quantity of output produced

A company has a degree of combined leverage of 1.25. Price per unit is $15 and variable cost per unit is $5. Interest costs is $10,000 and fixed costs are $190,000.

  Accepting or rejecting the offer

Suppose you have 500 acres of timberland, with young timber worth $40,000 if logged now. This represents 1,000 cords of wood worth $40 per cord net of costs of cutting and hauling.

  Sec compliance and related issues.

Suppose you're the Director of Finance for large publicly traded company. Examine the single most important element that a Director of Finance must practice diligently.

  A manufacturer of candy must monitor the temperature

A manufacturer of candy must monitor the temperature.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd