Determine investment risk in diversifying

Reference no: EM1349682

1. I own a professional football team, and I plan to diversify by purchasing shares in either a company that owns a pro basketball team or a pharmaceutical company. Which of these two investments are more like to reduce the overall risk I face? Why?

2. If mortgage rates raise from 5% to 10%, but the expected rate of increase in house prices rises from 2% to 9%, are people more or less likely to buy houses? ( Show your work to receive full credits).

Reference no: EM1349682

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