Week 2
discussion
Investments are based on the belief that the rate of return
justifies or compensates the investor for the risk associated with that
particular investment. The risk associated with this investment is associated
with the chance that a loss will be incurred. Or, to put it another way, the
greater the chance of a loss the more risky the investment. Therefore, some
statistical measures of the risk involved with an investment are necessary
before the investment is made.
Address all of the following questions in a brief but
thorough manner.
What is the Expected Rate of Return on an investment and
what does it tell us about the probability of the risk involved with a
particular investment?
How could the required rate of return of an investment be
estimated?
In terms of risk, what are the advantages (and/or
disadvantages) of a well-diversified portfolio?
The final paragraph (three or four sentences) of your
initial post should summarize at least the one or two key points that you are
making in your initial response.
single-spaced pages (500–1000 words) in length.
