Portfolio Investment Define and explain the use and advantages of an investment portfolio Portfolio investment is a modern investment method which consists of assets allocation and various...

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Portfolio Investment Define and explain the use and advantages of an investment portfolio Portfolio investment is a modern investment method which consists of assets allocation and various diversification process to create a collection of investment. The biggest challenge of investment is uncertainty as there are chances of future losses. Further, the advantages of portfolio investment are to reduce the risk than enhancing return. Secondly over a longer period of time the portfolio investment is able to provide a better than individual investment returns. Thirdly, whatsoever may be the economic situation, portfolio investment can be kept unadjusted. Fourthly, due to portfolio investment the loss from one security is compensated by gains from the other (Jay Way, 2021). What is the role of a portfolio in investing? Portfolio is a collection of financial investment which consists of stocks, bonds, cash and cash equivalents as well as commodities. It also consists of close ended and exchange traded funds. A portfolio may consist of a wide range of assets like real estate or in the form of a private investment (Carla Tardi, 2021). How does this contribute to diversification? Diversification is a process through which the portfolio investment is segregated into various asset classes. This is a way to balance the risk and rewards of the portfolio. It is a practice of spreading the investment so that the exposure to any one type of asset is restricted. It also helps to reduce the volatility of the portfolio over a period of time (Fidelity, 2021). When is a portfolio truly diversified? In order to be truly diversified the investors requires to have a collection of their own assets with various types of risk drivers that will perform and respond in different manners from one another (Wealth, 2021). References Jay Way, (2021); Sapling; The Advantages of Portfolio Investment; https://www.sapling.com/7379082/advantages-portfolio-investment Carla Tardi, (2021); Investopedia; What Is a Portfolio? https://www.investopedia.com/terms/p/portfolio.asp Fidelity, (2021); Why diversification matters; https://www.fidelity.com/learning-center/investment-products/mutual-funds/diversification Wealth, (2021); IS YOUR PORTFOLIO TRULY DIVERSIFIED? https://wealth.northerntrust.com/articles/is-your-portfolio-truly-diversified/ I completed most of the calculations. I am not sure what calculation I need to show for the finance the firm’s cash requirements through a revolving credit agreement at a cost of .5% (annual rate) of the monthly-unused portion of the credit line. The used portion of the credit line will cost 5% (annual rate). Determine who is right. Discuss advantages and disadvantages of CFO approach vs. Revolving credit (your approach). Based on the calculations, need to explain the advantages and disadvantages of going with revolving credit vs. fixed credit suggested by CFO.