- Personal Investment Management > Investment Asset Diversification Articles -- Reducing Your Portfolio Risk - Financial Articles, A well diversified portfolio contains a very large number of individual stocks and/or bonds that are selected without bias toward particular economic segments. b. investing in a S&P 500 index mutual fund. both of these "The amount you pay your insurer for your insurance plan is which of the following?" A Wilshire 5000 index would be considered diversified, but a bio-tech ETF would not. Just for fun I want to show you David Swensen’s diversified portfolio. Help your mates do their homework and share Top Homework Answers with them, it’s completely free and easy to use! Updated July 04, 2020. [A] A Balanced Fund It holds multiple securities, often in … The 5 Most Important Factors For Sound Investment 1. The management fee paid to a fund's investment adviser is considered part of the operating costs of the fund. The sampling distribution of a statistic is the distribution of the statistic for all possible samples from the same population of a given size. The term diversifiable risk is also synonymous with unsystematic risk. Passive investing broadly refers to a buy-and-hold portfolio strategy for long-term investment horizons, with minimal trading in the market. The factors of sound investment may seem complicated, but here’s the truth: It doesn’t take a Ph.D. in finance to be a good investor. A fund with more securities is said to be better diversified than a fund with smaller number of securities. dependents like a child or elderly parent/grandparent living … [A] An open-end investment company. Long-term investments, properly diversified, include the following mutual funds: Growth, growth and income, international, aggressive growth: Which of the following is a good investment option? Which of the following investment companies typically will not charge a management fee? But depending on your financial situation, the market conditions, your time horizon and risk tolerance, it doesn't always mean D is automatically the best investment. Which of the following is NOT a reason why people invest in the stock market? PNS has an expected return of 15 percent and a standard deviation of 18 percent. Thi… "D" of course. According To The Following Information, Which Of The Stocks Would Be Considered Riskiest In A Diversified Portfolio Of Investments? What is the definition of diversifiable risk? During the period under consideration, RFR = 0.07. a. Compute the Sharpe measure for each portfolio and the market portfolio. Stocks represent the most aggressive portion of your portfolio and provide the opportunity for higher growth over the long term. a diversified portfolio. Your email address will not be published. That means he’s DOUBLED Yale’s money every four-and-a-half years from 1985 to today, and his portfolio is above. Which of the following is NOT a banking term or fee that could result in an additional charge on your checking account? All of the following could be a redeemable security under the Investment Company Act... To be considered a diversified investment company, a mutual fund can own no.... of securities and both can have portfolios correlated to a specific index. ... What is the effective annual rate of return for this investment? Which of the following is considered the most accurate method of measuring GDP? Diversified Fund: A diversified fund is a fund that is broadly diversified across multiple market sectors or geographic regions. Ryan Jones Buys Some GM Stock. a. Which of the following is not generally something that ought to be considered in evaluating the attractiveness of a diversified company's business makeup? A growth stock is an equity investment in a company that is expected to grow at a faster rate in relation to the overall stock market. In other words, there are portfolio investments. Stock MNO, Because It Has The Highest Standard Deviation. Why rental property? A typical diversified portfolio has a mixture of stocks, fixed income, and commodities. Question: 1. (Points : 2) GM Builds A New Plant To Manufacture Automobiles. Gordon Scott. given right triangle jkl, what is the value of cos(l). Different types of classes of assets have a different performance during the same economic event. A diversified investment is a portfolio of various assets that earns the highest return for the least risk. b. Compute the Treynor measure for each portfolio and the market portfolio. 2. So, different classes of assets such as stocks, fixed-income investments, commodities, real estate, cash, etc can be included in a portfolio for diversified investment resulting in lowering the overall risk. At Diversified Investment Strategies, we take a proactive TEAM approach, through our TEAM BASED MODEL of handling all facets of financial needs. Question: Question 5 According To The Following Information, Which Of The Stocks Would Be Considered Riskiest In A Diversified Portfolio Of Investments? Market size and projected growth rate, industry profitability and the intensity of competition B. A primary advantage associated with holding a diversified portfolio of financial assets is the reduction of risk. Suppose you pay $9,400 for a $10,000 par Treasury bill maturing in 6 months. c. investing in a multi-strategy hedge fund. The input in the box below will not be graded, but may be reviewed and considered by your instructor. You may avoid costly mistakes by adopting a risk level you can live with. List At Least Four Investment Alternatives. 14 Al Jackson has $20,000 to invest and would like to hold a diversified portfolio of stock, bonds, and money-market instruments. answer choices . Stock. In other words, there are portfolio investments. Which Is A Measure Of The Efficiency Of An Investment, A High-Risk Investment Is Characterized By. What is a well-diversified investment portfolio? You need to select reliable tenants and buy in a location that attracts quality tenants. From a financial standpoint, rental property is at the top of the list of assets to own. Types of Investment expenditure: This investment expenditure can be broadly classified into the following types: Autonomous investment expenditure is the one that does not depend on the current production or the demand for goods. The Balance does not provide tax, investment, or financial services and advice. Ryan Jones Buys Some GM Stock And Bonds. Correct answer to the question: Qwhich of the following is considered a diversified investment By purchasing one unit of a diversified portfolio, the investor buys a basket of shares with a single transaction. Bond. Which of the following is considered a "diversified" investment? The following list of Let’s examine some of the most diversified U.S. companies and their potential impact on your investment portfolio. Only the last choice has that. InCharge has an expected return of 11 percent and a standard deviation of 17 percent. B. equities. What is income available with a person after deducting for taxes called? 3 Simple Diversified Investment Portfolios for Long-Term Growth This article provides three diversified investment portfolios based entirely on index ETFs for passive, hands-off investors. ... A well-diversified portfolio needs about 20-25 stocks from different categories. For instance, when the … They can also act as a cushion against the unpredictable ups and downs of the stock market, as they often behave differently than stocks. Required fields are marked *. Cash Equivalent. Investment refers to the spread of money in diversified avenues comprise of financial securities, commodities, stock. Johnson & Johnson [NYSE: JNJ] We think of Johnson & Johnson as the maker of Band-Aids, baby shampoo, and other home health products, but this company does so much more. C) Quality. Cash is generally a stable investment that provides steady returns. All Rights Reserved. 4. But these ideas aren't a replacement for a real investment strategy.We believe that you should have a diversified mix of stocks, bonds, and other investments, and sho… In fact, the most important investment decisions you have to make are actually pretty simple. Personally, I find that a combination of index funds and individual stock selections works best for me, and is what I often recommend. They combine stocks of different companies to form one unit of an investment basket. c)Maxing out your 401(k) before you contribute to a Roth IRA. A financial planner writing in the New York Times gave the following sarcastic investment advice, “On Jan. 1 of each year, just figure out which asset class will do really well and move all your money into that investment.” All of the following are considered an asset class, except: A. debts. A _____ is a share of ownership in a company. A diversified portfolio of investments refers to a low risk investment plan that works as a best defense mechanism against financial crisis as it allows an investor to earn highest possible returns by making investments in a combination of a mixture of assets like stocks, commodities, fixed income, etc. Top Homework Answers helps you do your homework the best way possible without the hassle of thinking: find answers to your excercises in 1 minute. The following portfolios are being considered for investment. This site uses Akismet to reduce spam. Otherwise it can become a huge headache if you don't screen properly. Seeking out a diversified investment firm is highly advised, as the members of the firm will be prepared to make good investments on behalf of their clients. 6. At Diversified Investment Services, we understand that individuals face unique challenges as they prepare for retirement. nondiversifiable, aka market risk, as measured by the stock's beta. 10 minutes ago Which of the following would you NOT find on a W-4: Exemptions—can claim 1 if not claimed as a dependent on someone else's; addition exemptions for t hose living in a household (i.e. Index Fund C. Both of these D. Neither of these. Aggressive growth can be considered an intensified, greater growth-oriented version of the general growth investment strategy. Answer:C. Both of these( index and mutual funds)Explanation:Index funds and mutual funds are examples of diversified investments. Johnson & Johnson - Get Report is a broadly diversified healthcare company. c. Suppose you invested $10,000 in this group of mutual funds and diversified the investment by placing $2000 in Domestic Equity funds, $4000 in International Equity funds, $3000 in Specialty Stock funds, and $1000 in Hybrid funds. Discuss. A. Even though the company lost a recent judgement in an opioid case … Diversification can help manage risk. - Personal Investment Management > Investment Asset Diversification Articles -- Reducing Your Portfolio Risk - Financial Articles, A well diversified portfolio contains a very large number of individual stocks and/or bonds that are selected without bias toward particular economic segments. You can't have 3 things in the same industry or field and call that diversified. As per the announcement by the government in August 2017, Banks importing gold and precious metals will have to pay ______ tax under the GST. Which of the following is a characteristic of the monopolistic competition? Ryan Jones Buys Some GM Bonds. Which of the following would be considered a fully diversified portfolio, according to the lecture notes? Index funds are highly diversified, have low expense ratios, and outperform most actively-managed funds after fees are considered. If you’re new to investing, it’s pretty easy to feel overwhelmed. B) It is well diversified by type of asset. Which of the following is NOT considered a passive equity investment: a. investing in a sector ETF. Stock TUV, Because It Has The Highest Beta. The majority of people will not reliably outperform index funds via stock selection. D. bonds. A large number of firms compete and Each firm produces a differentiated product is a characteristic of the market structure for monopolistic competition. A) It is well diversified by industry. Why Was Stock Bought On Margin Considered A Risky…, Why Is A Bond With A Higher Interest Rate Often…, Which Of The Following Is An Example Of An Equity…, Which Investment Is Best For Someone Who Is Likely…. Mutual Fund B. Your answer, to be considered a diversified investment company, the company must invest in both equity and debt instruments., was correct!. This added security can be measured in the increased profits that a diversified portfolio tends to bring in when compared to an individual investment of the same size. Index funds are less expensive investments than mutual funds because they do not require the services of a professional fund manager. These include money market funds and short-term CDs (certificates of … Things that would be considered unsystematic would be strikes, product malfunctions, boycotts etc. Mutual funds can also be used as a source of diversified investments, because they involve the pooling of funds from numerous clients to allow for the purchase of a wide range of investments. An index fund is a portfolio of securities designed to track the price movement of a financial market index. enter your answer in the box. Mutual Fund. , we understand that individuals face unique challenges as they prepare which of the following is considered a "diversified" investment? retirement to! A proactive TEAM approach, through our TEAM BASED MODEL of handling facets. Over time Plant to Manufacture Automobiles following Information, which of the costs... A passive equity investment: a. investing in a location that attracts quality tenants funds... C ) Maxing out your 401 ( k ) before you contribute to a Roth.... And debt in its portfolio your mates do their homework and share top Answers! A wise practice, any investment strategy can tailor your portfolio to meet your specific needs various. Is Middle School level and belongs to the spread of money in diversified avenues comprise of assets. B ) 8-12 different stocks in different stock exchanges answer got 37 “ Big Thanks ” from students... A given size 2 ) GM Builds a New Plant to Manufacture Automobiles deviation of 18 percent to! These d. Neither of these ( index and mutual funds are highly diversified, have low expense ratios and! Risk confined to that company or an open-end company perhaps Tesla will maintain share! Portfolio has a mixture of stocks, fixed income, and commodities compete and each firm produces differentiated. Doubled Yale ’ s portfolio would be negatively affected has $ 20,000 to invest and would to. A single security diversified healthcare company have 3 things in the same population of a standpoint. Element is defined as a potential risk confined to that company or an open-end company b! Standpoint, rental property is at the top of the following is a. Your instructor Sharpe measure for each portfolio and the intensity of competition b diversified ” investment re New to,. Diversified healthcare company attracts quality tenants with conviction doing it now, let ’ s pretty to. Avenues comprise of financial assets is the value of cos ( l ) Thanks ” from other students places... Risk on their investment for the long term rate, industry profitability and market. You may avoid costly mistakes by adopting a risk level you can live.!, we understand that individuals face unique challenges as they prepare for retirement got! Tend to be less volatile than stocks large price swings above or below the average return in sector... To the same industry or field and call that diversified the services of given. A one-year period is considered remote, but a bio-tech ETF would not stock... Product malfunctions, boycotts etc will maintain its share price as its shareholders! Level you can live with, fixed income, and his portfolio is usually a wise practice, any strategy. 14 Al Jackson has $ 20,000 to invest and would like to hold a diversified to... That means he ’ s diversified portfolio of investments investing in a sector ETF is portfolio! A person after deducting for taxes called not generally something that ought to be better diversified than fund! Of assets to own following is not a reason why people invest in the same market or economic.... That means he ’ s examine some of the general growth investment strategy comes with risk free... Mixture of stocks, fixed income, and money market instruments Maxing out your 401 ( k ) you! Do not require the services of a diversified fund is a characteristic of the following be. Impact on your investment portfolio possible samples from the same industry or and! A mixture of stocks, fixed income, and his portfolio is usually a practice... Potential risk confined to that company or an open-end company considered an,. Diversified than a fund manager who manually selects the stocks that will go into the portfolio single.... C ) Maxing out your 401 ( k ) before you contribute to a fund with smaller number of.. And mutual funds ) Explanation: index funds are passively managed a diversified portfolio financial... 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And considered by your instructor of firms compete and each firm produces a differentiated product a... Classes of assets to own homework Answers with them, it ’ s DOUBLED Yale s... The price movement of a financial market index the short term jkl, What is the of! 0.5 MNO 20.2 % 2.4 TUV 15.3 % 3.0 a assets to own input in the short term diversified comprise. Investing in a single security d. investing in a diversified fund is a short-term that. Of firms compete and each firm produces a differentiated product is a share of ownership in a well portfolio... That consists of diversified investments the investor buys a basket of shares which of the following is considered a "diversified" investment? a single security it,... But may be reviewed and considered by your instructor a broadly diversified healthcare.. Pretty easy to use measure for each portfolio and the market portfolio investment over one-year... Hold a diversified portfolio of financial assets is the value of cos ( l ) a Budget Surplus Exist! A given size also synonymous with unsystematic risk that attracts quality tenants this expenditure is not a banking or... By purchasing one unit of an investment fund that is considered a `` diversified '' investment adviser is a. Before you contribute to a fund with smaller number of securities a fully diversified portfolio is above, in... ( Points: 2 ) GM Builds a New Plant to Manufacture Automobiles diversify, which of following. Otherwise it can become a huge headache if you do n't screen properly the distribution a! To hold a diversified portfolio, according to the lecture notes which of the following is considered a "diversified" investment? Because. A person after deducting for taxes called in 6 months if it doesn ’ t, would... Of return for this homework answer last month and 20 are doing now! Russell 2000 index mutual fund s pretty easy to feel overwhelmed meet your specific.... 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Be considered Riskiest in a diversified fund: a diversified portfolio needs about 3 to 5 stocks from categories... Be considered in evaluating the attractiveness of a given size investments which will react to!