Risk management-portfolio approach and insurance
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Explain the portfolio approach to risk management.
Explain the use of insurance in managing risk.
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Solution Summary
-Portfolio approach to risk management
-Use of insurance in managing risk
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Risk management
Explain the portfolio approach to risk management.
Explain the use of insurance in managing risk.
Answer
Portfolio approach to risk management
A portfolio is simply a combination of investments. The portfolio approach to risk management states that a rational decision maker should not invest all of his monies in one security instead he should make a combination of securities with different risks and returns so that if one security is going down, the loss ...
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