If you were able to put together a portfolio that completely eliminated all risk, what return would...

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If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why?

If someone called you and told you that he/she could guarantee you high returns on your investments with little or no risk, what would you do and why.

When there is uncertainty in the marketplace, what happens to yield spreads and why?

Your grandfather has great faith in bonds and has heard about some “high yield bonds” that are available. He has asked you for your opinion. What advice will you give him?

Why do venture capital companies often choose preferred stock for their equity position?

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If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why? If someone called you and told you that he/she could guarantee you high returns on your investments with little or no risk, what would you do and why. When there is uncertainty in the marketplace, what happens to yield spreads and why? Your grandfather has great faith in bonds and has heard about some “high yield bonds” that are available. He has asked you for your opinion. What advice will you give him? Why do venture capital companies often choose preferred stock for their equity position?

1. If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why? 2. If someone called you and told you that he/she could guarantee you high returns on your investments with little or no risk, what would you do and why. 3. When there is uncertainty in the marketplace, what happens to yield spreads and why? 4. Your grandfather has great faith in bonds and has heard about some “high yield bonds” that are available. He has asked you for your opinion. What advice will you give him? 5. Why do venture capital companies often choose preferred stock for their equity position?

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Robert · Accepted Answer

Solution:- 
1. If you were able to put together a portfolio that completely eliminated all risk, what 
return would you expect to earn and why? 
In case we construct a portfolio which has no risk then in such case the expected return from 
such portfolio would be somewhere equal to risk free rate of return. The reason why a well 
diversified portfolio offers the return approximately equals to the risk free rate of return is that, 
when we create a well diversified portfolio then in such case we add different stock into our 
portfolio. These different stocks belong to different sectors of industry, and due to difference in 
the industry and sector the performance of all the stock differ in each probable situation, and 
when we compute the final result we end up computing the expected return somewhere near the 
risk free return. 
2. If someone called you and told you that he/she could guarantee you high returns on 
your investments with little or no risk, what would you do and why.

If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why? If someone called you and told you that he/she could guarantee you high...

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