1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
PtichkaEL [24]
3 years ago
5

Why is investing in individual stocks a risky idea? Explain in your own words.

Business
1 answer:
trapecia [35]3 years ago
5 0

Answer:

investing in individual stocks can be risky if you do not invest in a relatively large number of different stocks, because you need diversification in order to help limit your risk.

Explanation:

In general "putting all your eggs into one basket" can be a risky proposition. If you only have enough money to invest in one stock then if that stock goes down in value, your entire investment goes down by the same amount. However, if you are able to invest in multiple, diversified stocks - that is, stocks for companies that operate in varying fields or businesses - when one stock goes down in value it's possible/likely other(s) will not and may go up in value. Since mutual funds exist, and mutual funds that invest in stocks do so by investing in multiple stocks, you are able to reduce your risk by purchasing a mutual fund. Each and every share in a mutual fund spreads your investment across multiple stocks for you. Many investors just don't have enough money to invest in enough individual stocks to diversify their portfolio.

You might be interested in
Suppose that the most popular car dealer in your area sells 5 percent of all vehicles.
Advocard [28]
Ok so what is the question, I think you forgot a little bit of info
8 0
3 years ago
Land was acquired for $200,000 in exchange for common stock, par $200,000, during the year; all equipment purchased was for cash
diamong [38]

Answer:

Option (c) is correct.

Explanation:

Net cash provided by operating activities:

= Net income + Depreciation + loss on sale of Equipment + Decrease in prepaid expense + Increase in account payable - Increase in account receivable - increase in inventory - Decrease in accrued expenses

= $132,000 + 44,000 + 8,000 + 60,000 + 52,000 - 60,000 - 100,000 - 24,000

= $112,000

Note:

The balance sheet is missing in this question, so I attached the balance sheet with the answer.

3 0
3 years ago
Which of the following methodologies takes the list of desired customer attributes (CAs) generated by market research and turns
lianna [129]

Answer: B. Quality function deployment

Explanation:

Quality function deployment is a very useful process to the manufacturing, healthcare and service industry that was introduced in the 1960s in Japan. It refers to the process of converting the needs and requirements of customers for a good generated by market research to actionable plans and specification that engineers can then use to create the product in question and thus satisfy the need of the customer.

3 0
4 years ago
Project managers should always reward people who work overtime. <br><br> a. True <br><br> b. False
Goryan [66]
This is a true statement. A project manager should always reward employees who are willing to work overtime even if the overtime is mandatory. They may not reward the employees with a bonus, but should be rewarded with recognition of a job well done. 
3 0
3 years ago
You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $ 200 for the phone and then monthly c
riadik2000 [5.3K]

Answer:

I would chose carrier B

Explanation:

The reason i will choose carrier B is because if we consider the cost of capital which is 4% of $70, it is lesser than carrier A.

Calculation

If A = $200  

Assuming Maintenance = $60 for 24 month

4% of $60 = 2.4

Now considering we keep replacing the phone after the contract expires and cost of capital is 4%

Therefor: 4% of $60 × 24 =57.6

If we run the same calculation for carrier B,

we have, 4% of %70 = 2.8

therefor: 2.8 × 12 = 33.6

Carrier B is therefore cheaper so ill go for it.

5 0
3 years ago
Read 2 more answers
Other questions:
  • Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Ending Balance Beginning Balance Cash and cash equi
    14·1 answer
  • If a business /industry does not meet OSHA standards?
    6·1 answer
  • John Jansen, an employee of Redwood Company, had gross earnings for the month of May of $4,000, FICA taxes are 8% of gross earni
    10·1 answer
  • Reliable Car​ Parts, a manufacturer of spare​ parts, has two production departmentslong dashAssembling and Packaging. The Assemb
    14·1 answer
  • Sterling, Inc. is a manufacturer of state-of-the-art computers. For the past ten years, Sterling has acquired all of its microch
    15·1 answer
  • How do factors of production have alternative uses
    8·1 answer
  • The problem with bank runs is not that ____________will fail; they are, after all, bankrupt and need to be shut down. The proble
    15·1 answer
  • Having worked professionally for 10 years, Tom and Kate have decided to start a new franchise. Considering their background, a d
    14·1 answer
  • As head of the sales team, Kevin has the power to dispense sales leads to the members of the team. He gives the best leads to th
    5·1 answer
  • The Easton manufacturing Company is looking to replace its conveyor belt system. A new system will cost $345,000, and will resul
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!