9. reduces risk b y allocating investments proportionally to the investment pyra

Question

9. reduces risk b y allocating investments proportionally to the investment pyramid. A) Time management of money B) The lottery C) Budgeting D) Diversification B are funds that invest in international and domestic companies. A) B) C) D) Balanced mutual funds Global funds International funds Exclusive funds 11. A) What is a major disadvantage of owning rental property? Risk of the tenant not making all of his or her rent payments. B) C) D) You cannot evict a tenant. You cannot set your own rules for the house. All of the options are correct 12. A) B) C) D) What does ROI stand for? Return on index Rental of investment Return on investment Rich on investment

Explanation / Answer

These are all definitions or characteristics that we need to match.

Q9. DIVERSIFICATION. It is the a risk management technique that mixes a wide variety of investments within a portfolio. This reduced the 'unsystematic risk' within the portfolio and hence reduces overall volatility in portfolio.

Q10. GLOBAL FUND. Global fund can invest in any of the companies - within or outside the investor's country of residence. An international fund can invest in companies located anywhere outside of its investors' country of residence.

Q11. Risk of tenant not making all of his or her rent payments.Tenants are never a guarantee to pay their rent, and hence there is a credit risk involved there.

Q12.RETURN ON INVESTMENT. ROI is used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.

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