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3 years ago

Discuss how construction of a portfolio can lower the risk of an investor.

Business

1 answer:

Firdavs [7]3 years ago

7 0

Answer:

Simply put, the other meaning portfolio construction is diversification of risk. Portfolio construction is the one of simplest way of reducing risk without significantly affecting the returns.

Ways of diversifying risk includes Pension Funds, Mutual Fund, Equity, Stocks, Debt / Bonds, Retirement Saving, etc. If someone had made their investment in only one asset class, then there will be less returns available with high risk. while doing portfolio investment, it will give a systematic and controlled risky investment with higher return opportunities because some assets will perform well while other do poorly. but next year scenario could be changed or reversed. There are some thumb rules while doing portfolio investment, but it can be changed based on individual's personal goal.

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A company was the victim of several frauds that totaled approximately $10 million in one year. With a profit margin of 10 percen

Arisa [49]

Answer:

100,000

Explanation:

Given that

Approximately frauds = $10 million

Profit margin = 10%

And the sale value of the product per unit = $1,000

So by considering the above information, the additional units is

= Approximately frauds × Profit margin

= $10 million × 10%

= 100,000

So by multiplying the approximate frauds with the profit margin we can get the additional units

8 0

3 years ago

Why can deadweight loss occur when a price is below the equilibrium even when some consumers benefit from it?

soldi70 [24.7K]

When a shortage occurs, some consumers are fortunate enough to benefit from a lower price if they purchase the good or service before the price increase occurs.

7 0

3 years ago

Klingon Widgets, Inc., purchased new cloaking machinery four years ago for $8 million. The machinery can be sold to the Romulans

alisha [4.7K]

Answer and Explanation:

The computation is shown below:

But before that we need to find out the current asset which is

The Net working capital = Current assets - current liabilities

$246,000 = Current assets -$790,000

So, the current assets is $1,036,000

Now the book value of Klingon’s total assets is

Total assets = Current assets + net fixed assets

= $1,036,000 + $6,000,000

= $7,036,000

The sum of market value of NWC and fixed assets is

= Market value of net working capital + market value of fixed assets

= $1,130,000 + $7,400,000

= $8,530,000

7 0

3 years ago

In a dutch-internet auction, the highest price wins. a. true b. false

Zolol [24]

A. True in a dutch interenet auction the highest price wins

7 0

4 years ago

Your company is considering a new project that will require $10,000 of new equipment at the start of the project. The equipment

zmey [24]

Answer:

Estimate the present value of the tax benefits from depreciation:

D. $1,851

Explanation:

Step 1: Determine annual depreciation

A.D=(A.C-S.V)/N

where;

A.D=annual depreciation

A.C=acquisition cost

S.V=salvage value

N=useful life

In our case;

A.D=unknown, to be determined

A.C=$10,000

S.V=$3,000

N=5 years

replacing;

A.D={(10,000-3,000)/5}=7,000/5=$1,400

Annual depreciation=$1,400

Step 2: Determine annual tax benefits

Annual tax benefits=tax rate×annual depreciation

where;

tax rate=34%=34/100=0.34

annual depreciation=$1,400

replacing;

Annual tax benefits=0.34×1,400=$476

Step 3: Determine present value of the annual tax benefits

Year Future value Present value

1 476 476/{(1+0.09)^1}=436.70

2 476 476/{(1+0.09)^2}=400.64

3 476 476/{(1+0.09)^3}=367.56

4 476 476/{(1+0.09)^4}=337.21

5 476 476/{(1+0.09)^5}=309.37

Total present value of the tax benefits=436.70+400.64+367.56+337.21+309.37=$1,851.48

Estimate the present value of the tax benefits from depreciation=$1,851

3 0

3 years ago