List 3 reasons for diversifying a portfolio

Reference no: EM13289772

What is the difference between the Direct Method and Indirect Method for calculating Cash Flow? Explain how the two methods are reconciled and also provide a brief description of each method.

1-List 3 reasons for diversifying a portfolio via international investing

2. What is the risk factor associated with international investing that potentially can also be viewed as a benefit [and hence, a 4th reason to invest internationally -- see question #1]. IF this factor is trending favorably for your investment portfolio, briefly explain why it is a benefit

On a risk/return basis, rank order the following asset classes from lowest to highest based on the following data. (a) Small stocks: E(r) = 18.15% and standard deviation = 36.94%; (b) Large stocks: E(r) = 11.50% and standard deviation = 20.14%; (c) US Treasury bonds: E(r) = 5.45% and standard deviation = 8.06%; How would this rank order change if the return for each class [i.e., the E(r)] were each reduced by a 3% inflation factor?

Reference no: EM13289772

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