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
Juliette [100K]
3 years ago
9

The benefits of portfolio diversification are highest when the individual securities have returns that Group of answer choices A

re counter-cyclical Vary indirectly with the rest of the portfolio Are uncorrelated with the rest of the portfolio Vary directly with the rest of the portfolio
Business
1 answer:
emmasim [6.3K]3 years ago
4 0

Answer:

Are uncorrelated with the rest of the portfolio

Explanation:

Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio

Non systemic risk are risks that can be diversified away. they are also called company specific risk. Examples of this type of risk is a manager engaging in fraudulent activities.

The highest benefit of diversification is when the securities are uncorrelated

Correlation is a statistical measure used to measure the relationship that exists between two variables.

1. Positive correlation : it mean that the two variables move in the same direction. If one variable increases, the other variable also increases.

For example, there should be a positive correlation between quantity supplied and price

When there is a positive correlation, the graph of the variables is upward sloping

2. Negative correlation :  it mean that the two variables move in different direction. If one variable increases, the other variable decreases.

For example, there should be a negative correlation between quantity demanded and price

When there is a negative correlation, the graph of the variables is downward sloping

3. Zero correlation : there is no relationship between the variables

You might be interested in
A rich relative has bequeathed you a growing perpetuity. the first payment will occur in a year and will be $ 3 comma 000$3,000.
MAVERICK [17]
A. For knowing today's value of the bequest we need to know the period of time.
When the first payment occure and how many payments were made. 
b. Immediate value of bequest is $3,000 After one year it needto be 1.16*3,000=$3,480 Plus the second payment will be 1.04*3,000=$3,120
8 0
3 years ago
Solvency refers to: A. long-term ability to generate sufficient cash to satisfy plant capacity needs, fuel growth, and to repay
Papessa [141]

Answer:

A. long-term ability to generate sufficient cash to satisfy plant capacity needs, fuel growth, and to repay debt when due.

Explanation:

Solvency is defined as the long-term ability of a business the generate enough cash flow that will allow it to continue its operations and also to pay of its debt when due.

It is used as a measure of the financial health of the business.

A business with good solvency has a high probability of remaining in operation for the foreseeable future.

4 0
3 years ago
As a new manager, Candace has had to learn a lot, and sometimes her job is more stressful than she expected. As a manager, she n
ExtremeBDS [4]

Answer: disturbance handler; decisional; more through others.

Explanation:

As a new manager, Candace has had to learn a lot, and sometimes her job is more stressful than she expected. As a manager, she needs to fulfill many roles. Candace schedules employees for shifts at the front desk, in the dog play areas, and in the bathing and grooming rooms.

This is part of the disturbance handler role of management, which falls under the decisional component. To adapt to being a manager, Candace has had to get things done by working more through others.

4 0
3 years ago
Why is a high-quality bond typically considered a lower-risk investment than a stock?
Verdich [7]
<span> <span>In investment, the term risk can be defined as the possibility of the investor losing all or part of their capital in a given venture. High quality bonds are considered lower risk because the the investor is promised to receive face value after a certain period unlike stocks that do not carry the same promise. Returns on high quality bonds are also guaranteed in the form of fixed interest rates whereas in stocks, a company may pay dividends but this is not an obligation on their part. Lastly bonds are safer investment as they are less susceptible to abnormal price changes unlike stocks whose prices can easily swing in either direction.</span></span>
8 0
3 years ago
When making decisions, evaluating your possible resources will help _____. a. Impose limits to possible choices b. Add weight to
Slav-nsk [51]
A impose limits to possible choices


I'm pretty sure.
4 0
3 years ago
Read 2 more answers
Other questions:
  • Consider a portfolio comprised of four risky securities. Assume the economy has three states with varying probabilities of occur
    8·1 answer
  • The High Towers Center is a 300-room hotel that was built ten years ago for a total project cost of $24,000,000. The market valu
    10·1 answer
  • Dextra Computing sells merchandise for $15,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires
    15·1 answer
  • Nivea became the leader in the skin cream class on the "gentle," "protective," and "caring" platform. The company further moved
    12·1 answer
  • 1. On January 1, 2018, Golden Company purchased a delivery truck for $64,000. The van was estimated to have a 5-year useful life
    13·2 answers
  • You have been placed in charge of a large project. Shortened communication lines are required to ensure quick resolution of prob
    10·1 answer
  • Joe was tired of working for other people. He had an idea to start his own ice cream business and wanted to set it up where he a
    5·1 answer
  • If the company were to issue an annual zero-coupon bond with a maturity of 2 years and par value of $1,000, what would be the ar
    11·1 answer
  • The following information applies to the questions displayed below.
    10·1 answer
  • strategies are incentives a manfacturer offers to its distribution partners such as dealers, wholesalers, retailers, and the lik
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!