Risk of Finance, Portfolio, Investments
Not what you're looking for?
1) What are unique risks associated with foreign investments? How might an investor protect his/her portfolio against these risks? Is it possible to protect a portfolio from all types of risk? Explain your answer.
2) Does international diversification enhance risk reduction? Why or why not? What measures can be taken to reduce the risks of international portfolio investing?
3) Why would a portfolio manager pursue active versus passive management techniques? Why would a portfolio manager pursue active versus passive management techniques? Is it ever preferable to use a passive portfolio management technique? Why or why not?
4) What is an efficient portfolio? How are the return and standard deviation of a portfolio determined? How must assets be evaluated to achieve a minimum variance portfolio? Explain your answer.
Purchase this Solution
Solution Summary
Risk of Finance, Portfolio, Investments is discussed very comprehensively in this explanation..
Solution Preview
1) What are unique risks associated with foreign investments? How might an investor protect his/her portfolio against these risks? Is it possible to protect a portfolio from all types of risk? Explain your answer.
The unique risks associated with foreign investments:
1. The risk of foreign exchange fluctuation;
2. The risk that the funds would not be repartriated;
3. The risk of political turbulence leading to seizure of investments;
Possible to protect portfolio:
1. There can be protection against foreign exchange risk by purchasing forward contracts for foreign exchange.
2. There can be protection against risks of repartrication by selecting a country which has a repatriation treaty with the parent country.
3. There can be protection against risk of turbulence by selecting a politically stable country for investment.
2) Does international diversification enhance risk reduction? Why or why not? What measures can be taken to reduce the risks of international portfolio investing?
Not really, international diversification cannot enhance risk reduction because the ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
Recent Feedback
- "I read your comments, and thank you for this feedback. Do I need to find other studies that applied this methodology Ive used? That's where I'm stuck at."
- "Thank you kindly sir. "
- "Excellent and well explained. --Thank you kindly. "
- "Awesome notes. I appreciate you."
- "I have the follow-up project and I will assign that to you very soon. "
Purchase this Solution
Free BrainMass Quizzes
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.