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    Investor stock and Bond/bank loan

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    Can an investor holding one stock earn a return commensurate with its risk?

    Why is a bond preferable over a bank loan?

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    https://brainmass.com/business/finance/investor-stock-bonds-bank-loans-177074

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    The response address the queries posted in 506 words with references.
    As per the requirement of the paper, it will discuss that whether investor holding one stock earn a return commensurate with its risk or not. It will also discuss that why a bond is preferable over a bank loan.

    Investor stock and Bond/bank loan

    Can an investor holding one stock earn a return commensurate with its risk?

    No, an investor holding one stock cannot earn a return commensurate with its risk. Risk can be minimized by holding the portfolios. A portfolio is a bundle or combination of individual assets or securities. The portfolio theory provides a normative approach to investors to make decisions to invest their wealth in assets or securities under risk. It is based on the assumption that investors are risk averse. This ...

    Solution Summary

    This solution discusses investor stocks, bonds and bank loans.

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