Question

Why do many investors hold portfolios of numerous investments? Group of answer choices to maximize returns...

Why do many investors hold portfolios of numerous investments?

Group of answer choices

to maximize returns

to capture voting rights across many different corporations

to receive higher dividend payouts

diversification benefits

to maximize risk

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : diversification benefits

There are two types of risks : systematic risk and unsystematic risk.

systematic risk, also known as market risk can not be completely reduced or diversified away, but unsystematic risk can de reduced by diversified by investing in varied investment.

Unsystematic risk is particular for a firm or industry. so we can reduce it by investing in different sectors or industries

So the purpose is to get diversification benefits and thereby reducing risk.

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
To say that investors are risk-averse means that Group of answer choices they hope for high...
To say that investors are risk-averse means that Group of answer choices they hope for high returns from high-risk investments, but generally expect low returns. they will invest only in safe investments such as insured savings accounts and government securities. they require higher potential returns as compensation for accepting higher risk. when given a choice between risky investments and safe ones, they will buy only safe investments.
What do Amazon’s bondholders and stockholders have in common?               Group of answer choices All of...
What do Amazon’s bondholders and stockholders have in common?               Group of answer choices All of these are true. Two of these are true, Both are stakeholders in the company. Both hold claims on Amazon’s profits and have the right to receive distributions of those profits. Both have voting rights and are represented by Amazon’s board of directors. Both hold claims on the Amazon’s income and assets.
1.Which of the following is an example of moral hazard? Group of answer choices There are...
1.Which of the following is an example of moral hazard? Group of answer choices There are likely more cars of low quality than of high quality offered for sale without warranties in the used car market. An individual who eats well and exercises regularly chooses not to purchase health insurance. An individual drives less cautiously after obtaining automobile insurance. A car salesman offers a full warranty on a used car for 90 days. 2. The possible returns to a shareholder...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4 Q2 A variety of investments is available in the marketplace. What types of investors (clienteles) are most appropriate for (a) municipal bonds (b) hi growth, low dividend stocks (c) lower growth, high dividend stocks? Chapter Summary Different economic activities are taxed differently, even if undertaken in the same organizational form. The unequal taxation of returns affects the demand for investment and thereby affects the...
Holding period and annual? (investment) returns. Baker Baseball? Cards, Inc. originally purchased the rookie card of?...
Holding period and annual? (investment) returns. Baker Baseball? Cards, Inc. originally purchased the rookie card of? Hammerin' Hank Aaron for $ 33.00. After holding the card for 4 years, Baker Baseball Cards auctioned the card for $132.00. What are the holding period return and the simple annual return on this? investment? Investment Original Cost of Investment Selling Price of Investment Distributions Received Percent Return + + ??CD ? $500 ?$540 ?$0 ?? ??Stock ?$23 ?$34 ?$2 ?? ??Bond ?$1,040 ?$980...
Lebanon’s infrastructurewas extremelydamaged by the 1975-1990 civil war. The quality of public utilities decayedfurther after the...
Lebanon’s infrastructurewas extremelydamaged by the 1975-1990 civil war. The quality of public utilities decayedfurther after the war in 2006 and the Syrian war in 2011.Since then, Lebanonhas lacked sustainableelectricity, education, health, transport and other basic networksdue to the chronic inability of successive governments to manage and plan them.As a result, the growth of the economy has been severely constrained.The public company Electricite du Liban (EdL) weighs heavily on the government’s expenditures. Subsidies to EdL stood at an average of $1.85B...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From the April 2004 Issue Save Share 8.95 In 1991, Progressive Insurance, an automobile insurer based in Mayfield Village, Ohio, had approximately $1.3 billion in sales. By 2002, that figure had grown to $9.5 billion. What fashionable strategies did Progressive employ to achieve sevenfold growth in just over a decade? Was it positioned in a high-growth industry? Hardly. Auto insurance is a mature, 100-year-old industry...
What role could the governance of ethics have played if it had been in existence in...
What role could the governance of ethics have played if it had been in existence in the organization? Assess the leadership of Enron from an ethical perspective. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among the top Fortune 500 companies, collapsed in 2001 under a mountain of debt...
Discuss ethical issues that can be identified in this case and the mode of managing ethics...
Discuss ethical issues that can be identified in this case and the mode of managing ethics Enron finds itself in this case. How would you describe the ethical culture and levels of trust at Enron? Provide reasons for your assessment. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT