Diversification is most effective when

Assignment Help Financial Management
Reference no: EM13952339

Other things equal, diversification is most effective when

A. Securities returns are uncorrelated.

B. Securities' returns are positively correlated.

C. Securities' returns are high.

D. Securities' returns are negatively correlated.

E. Both securities' returns are positively correlated and securities' returns are high.

Reference no: EM13952339

Questions Cloud

Consumer products company in a third-world country : As you have learned in this first unit, pollution is a worldwide issue that must be combatted. Read the scenarios provided below, and choose one to write about for your essay.
What do you think the future best practices might look like : What do you think the future best practices might look like? How might you care for the professionals in a field while they are caring for their clients
Calculate the sun orbital speed in meters per second : An astronomer on a hypothetical planet orbiting the star Vega, 25 light-years from the Sun, wants to use the astrometric method to search for planets orbiting the Sun. What would be the angular diameter of the Sun's orbit as seen by this alien astr..
Physical aspect of the marketing environment : The VCR is a physical aspect of the marketing environment that has affected moviegoing behavior in the United States. Compare and contrast the consumption situations of watching a movie in a theater versus seeing the same movie at home on your DVD..
Diversification is most effective when : Other things equal, diversification is most effective when
Explain why maintaining the state is an essential part : Explain why maintaining the state is an essential part of any Web application. Present a brief summary of the techniques which are available for a developer to achieve this goal. How secure are these different tools ? When would you use the one but n..
What types of decisions-discontinuing a business segment : What types of decisions, other than make-or-buy, discontinuing a business segment, or using a constrained resource, can be analyzed using relevant costs?
Find the sum of the 1st and the 31 term. : how many jackets must he have so that if he wore a different set of shirts and jeans each day, he could continue for 140 days before he would have to repeat a set.
Encompassing lower risk : You are founder of a new Boston-based company, London Inc. The Company will provide luxury tours in the United Kingdom. The Company has its headquarters in Boston and is considering it operating structure in the UK. Contract with independent contract..

Reviews

Write a Review

Financial Management Questions & Answers

  An employee contributes

An employee contributes 6 percent of her salary to her 401(k) plan and her employer contributes another $1,900. The employee earns $75,000 and is in a 28 percent tax bracket. If the employee earns 8.50 percent on all funds invested each year and her ..

  Considering a new three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.88 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life.

  Pay for the lockbox system

Hardin-Gehr Corporation (HGC) began operations 5 years ago as a small firm serving customers in the Detroit area. However, its reputation and market area grew quickly. If HGC has an opportunity cost of 10%, how much is the lockbox system worth on an ..

  Estimate target maximum acquisition price when discount rate

The table below shows the projected free cash flows of an acquisition target. The potential acquirer wants to estimate its maximum acquisition price at an 8% discount rate and a terminal value in year 5 based on the perpetual growth equation with a 4..

  Eplain what are the lifetime fees and investment capital

You can assume the fund is fully invested by the beginning of year 6, and then realizes 20 percent of its investment capital in each of the following ?ve years. What are the lifetime fees and investment capital for this fund? (Make assumptions for..

  Measure risk relies on probability distribution

This will be a real challenge, but it should be an interesting challenge. Much of the way we measure risk relies on probability distribution (the bell curve as shown on page 425). For many things in life, and business, this is perfectly valid, but fo..

  Find the present value of this perpetuity

A perpetuity will make payments of $50,000 every third year, with the first payment occurring three years from now. The effective annual interest rate is 8%. Find the present value of this perpetuity.

  Find the present value of these cash flows

You have accumulated some money for your retirement. You are going to withdraw $$99035 every year at the end of the year for the next 24 years. How much money have you accumulated for your retirement? Your account pays 10.87 percent per year, compoun..

  Working capital will revert back to normal at end of project

Your firm is contemplating the purchase of a new $672,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $56,000 at the end of that time. Working capital will revert ba..

  To gain an understanding of your selected business

throughout this course you will conduct a strategy audit for a selected company. begin this assignment by selecting an

  Bond issuer will not be able to make timely payments

Which of the following terms is the chance that the bond issuer will not be able to make timely payments?

  The futures price for gold for three month contract on gold

The spot price for gold is $1,300 per ounce. The dividend yield on the S&P 500 is 5.4%. The risk-free interest rate is 7.5%. The futures price for gold for a 3-month contract on gold should be __________.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd