Question

Which of the following is not a tool of asset management? A. purchase securities with low...

Which of the following is not a tool of asset management?

A. purchase securities with low returns and high risks.

B. lower risk by diversifying.

C. find borrowers who will pay high interest rates and have low possibility of defaulting

D. balance need for liquidity against increased returns from less liquid assets.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correct answer is Option A = Purchase securities with low returns and high risks.

Reason:

  • Asset management is a tool used by asset management firms,
  • who invests in assets on behalf of their clients ,
  • in a porfolio in such a way, that the risks are lowered and returns can be higher.
  • thus statement given in option A is clearly not correct, Purchase securities with low returns and high risks is not a tool of asset management.
  • this motive is achived by diversifying the portfolio, to lower the risk.
  • Also in case of banks , in order to maximise the returns and lower the risk,
  • they try to find borrowers , whom they can charge higher interest rates with a low possibility of default on repayment by customer.

~~~~~~~~~

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A main argument for investing in US securities is the: Multiple Choice low risk of owning...
A main argument for investing in US securities is the: Multiple Choice low risk of owning them. varied time frame of payment for different types of securities. low rate of interest high rate of interest. Over the two decades leading up the 2008 crisis, __________ interest rates meant that consumers could take on _____ debt without significantly increasing the amount of debt service they had to pay. Multiple Choice falling; more falling; less rising; more rising; less The sudden explosion...
1. Consider the following information from Snuggie Corp.'s most recent Income Statement. Net Sales were $924,...
1. Consider the following information from Snuggie Corp.'s most recent Income Statement. Net Sales were $924, Operating Costs (excluding depreciation) were $270, and Depreciation and Amortization Expense was $155. The firm's Interest Expense for the year was $80, and the firm's marginal tax rate is 35%. The firm's Operating Cash Flow for the year is $_____________. 2. Schnucki Corp's. Operating Cash Flow for 2011 was $1225 and its Depreciation Expense for 2011 was $242. On 12/31/10 the balance in the...
Which of the following statements is CORRECT? a. In general, it's better to have a low...
Which of the following statements is CORRECT? a. In general, it's better to have a low inventory turnover ratio than a high one, as a low one indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock. b. The more conservative a firm's management is, the higher the firm's total debt to total capital ratio is likely to be. c. A decline in...
1a. To which of the following does the Fed, as used in the United States, refer?...
1a. To which of the following does the Fed, as used in the United States, refer? The country’s central bank The Treasury Department The federal government The Federal Deposit Insurance Corporation b. If a bank’s assets and its liabilities are equal, the bank is said to be _______. insolvent in balance maximizing its profit fully utilizing its resources c. The possibility that borrowers will not be able to repay their loans on time or in full is known as ________...
6. Consumer loans, mortgage loans, government and municipal securities, and reserves will be found in the...
6. Consumer loans, mortgage loans, government and municipal securities, and reserves will be found in the ____ of a typical depository institution. Select one: a. asset category in the balance sheet b. income statement c. capital category of the balance sheet d. liability category of the balance sheet 7. An investor will engage in a short sell when he/she expects the stock price to ____ in the future. Select one: a. increase b. fall c. remain the same d. increase...
1. An interest rate that is low for only a short period of time is called:...
1. An interest rate that is low for only a short period of time is called: a teaser rate. a balance transfer fee. a balloon payment. an annual percentage rate. 2. Which of these is NOT a way financial institutions reduce risk? collecting information helpful for risk assessment diversifying funds performing credit checks on borrowers guaranteeing a high rate of return for all lenders 3. Traditional Individual Retirement Accounts (IRAs) are taxed: when you make contributions and again when you...
*The very low interest rates following the financial crisis of​ 2007-2009 resulted​ in: A. further declines...
*The very low interest rates following the financial crisis of​ 2007-2009 resulted​ in: A. further declines in checking accounts that began in early 1970s. B. many people moving their funds from CDs and money marketaccounts to checking accounts in order to have more liquidity without sacrificing much interest. C. people switching their funds from checking deposits to CDs in the pursuit​ of higher interest rates. D. funds being transferred from checking accounts to time deposits. *Finance companies A. raise funds...
1. Which of the following statements is not a purpose for a cash budget? A. A...
1. Which of the following statements is not a purpose for a cash budget? A. A cash budget indicates when the firm will be profitable. B. A cash budget indicates when and how much financing the firm will need. C. A cash budget can be compared with actual results to shape corrective actions. D. A cash budget can be a method of evaluating an employee’s performance. 2. Which of the following is not an accurate trade-off relevant to working capital...
Which of the following statements about the annual report are true? (Select all that apply.) Check...
Which of the following statements about the annual report are true? (Select all that apply.) Check All That Apply Annual reports of public companies include an assessment of the company’s internal control procedures. Annual reports of public companies include an assessment of the company’s internal control procedures. The company’s auditor prepares the financial statements while its management prepares the other information and disclosures required in the annual report. The company’s auditor prepares the financial statements while its management prepares the...
Consider the following bank balance sheet (fixed rates and pure discount securities unless indicated otherwise). Interest...
Consider the following bank balance sheet (fixed rates and pure discount securities unless indicated otherwise). Interest rates on liabilities are 10 percent and on assets are 12 percent. Assets $m Duration (years) Liabilities and Equity $m Duration (years) Prime-Rate Loans (rates set daily) 50 1.0 Super Now Checking Accounts (rates set daily) 100 1.0 2-Year Car Loans 65 1.0 6-Month Certificates of Deposit 40 0.5 30-Year Mortgages 60 7.0 3-Year Certificates of Deposit 25 3.0 Total Assets 175 ? Total...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT