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1 year ago

Why does including reits in a portfolio containing s&p 500 securities produce diversification benefits?

1 answer:

7 0

REIT returns are highly correlated with returns from other stocks is including reits in a portfolio containing s&p 500 securities produce diversification benefits. Hence, option C is correct.

<h3>What is stock portfolio?</h3>

A stock portfolio is a collection of stocks that a person invest in with the hope of making money. By putting together a diverse portfolio that covers numerous industries, you can develop your investing skills.

For many years, constructing a 60/40 portfolio in which 60% of the capital would be put in stocks and 40% in fixed-income instruments such as bonds was commonly suggested by financial consultants. Others have called for more equity exposure, particularly younger investors.

Thus, option C is correct.

For more details about stock portfolio, click here:

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The options are missing-

(A) REIT returns are enhanced by the dividend payout requirement

(B)REIT returns are not subject to federal income taxes if certain rules are met

(C)REIT returns are highly correlated with returns from other stocks

(D)REIT return are not highly correlated with returns from other stocks

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Cost Behavior Prepare income statement in two formats Farnsworth Drycleaners has capacity to clean up to 7,500 garments per mont

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Answer:

(1)

Fees revenues 42,600

Total expenses 1.92 x 4260 = 8179.2

<em>Net income 34,420.8</em>

Fees revenues 42,600

Variable cost 2,982

Contribution Margin 39,618

Fixed Cost 14,400

Net Income 25,218

Explanation:

(1)

We multiply by the garment cleaned

10 x 4,260 = 42,600

0.7 x 4,260 = 2982

and distribute the fixed cost among the normal capacity

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.7 + 1.92 = 2.62 cost per garment

(2)

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Answer:

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