Why do single stocks carry a high degree of risk? why do mutual funds carry less risk?

1 answer:

7 0

Mutual funds carry less risk compared to single stocks because mutual funds are more convenient and diversified. Mutual funds are being professionally managed by money managers. They are responsible in allocating the money to stocks, bonds or other money market securities.

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5 months ago

Allegience Insurance Company’s management is considering an advertising program that would require an initial expenditure of $16

nalin [4]

Answer:

a. Pay back period is 4 years and 18 days

b. Net present value is - $5,909. Since the NPV is negative, the project should be rejected.

Explanation:

Note: See the attached for the calculation tables of a and b.

a. Pay back period = 4 years and [($2,565/$51,244)*365 days] = 4 years and 18 days approximately.

Download xlsx

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