2 years ago

3. What type of risk is relevant for determining the expected return?

Business

1 answer:

erma4kov [3.2K]2 years ago

8 0

Answer:

Systematic risk.

Explanation:

Systematic risk corresponds to the risk of the financial market as a whole. In other words, it is the risk that affects the economy and it is difficult to predict and prevent it from occurring. As an example, a risk of bankruptcy of financial institutions and banks can be mentioned.

This systemic risk therefore affects the expected return on an investment.

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which if the following may not be purchased on margin but can be used as collateral for a margin loan after being held for 30 da

inn [45]

A mutual funds is the instrument that may not be purchased on margin but can be used as collateral for a margin loan after being held for 30 days.

<h3>What is purchased on margin?</h3>

This generally involves the act of getting a loan from your brokerage and then, using the money from such loan to invest in more securities than you can buy with your available cash.

Through the method, an investors can amplify their returns if their investments outperform the cost of the loan itself.

In conclusion, the mutual funds can be purchased on margin. However, it may be used as collateral for a margin loan after being held for 30 days.