8. Diversitication is principle 7. Unsystematic risk is diversifiable a. True b.

Question

8. Diversitication is principle 7. Unsystematic risk is diversifiable a. True b. False 8. Time Horizon is not a factor impacting asset allocation decision a. True b. False 9.Jn investing, principleis very relevant, that nothing happiens without a plan a- 1 10. One of the tips to getting your investment program started is b3 c8 d6 62 a. Baying that new car b. Making a down payment on the house c Making investment automaic d Paying taxes op the house c. Making investment automatic taxes op time 11.Asset allocation is determining if you will like to invest Tue b. False 12 Bonds ate examples of an ownership investment a True b. False 13.Investment is putting money in an asset that generates value or a return a. True b False 14.You bought 400 shares at $90 each. After 6 months, the shares are now worth $60 each. If the company paid $1.50 dividend per share duting the 6 months, how much profit or loss have you made on the transaction? a $12,000 gain b. $12,000 loss $11,400 loss d.$11,400 gain e$12,600 loss 15.All risks can be diversified a. True b. False

Explanation / Answer

Since, multiple questions have been posted and some of them are based on principles which have not been stated in the question, I have answered question 7 and question 8 with explanation.

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Question 7:

The statement is True.

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Explanation:

Unsystematic risk is specific to the company/industry to which the security belongs. It is not influenced by market factors which may affect all the investments/securities. Therefore, it is possible to diversify unsystematic risk through investments in multiple securities/forms of securities.

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Question 8:

The statement is False.

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Explanation:

Time horizon is one of the factors affecting the asset allocation decision. Depending on the financial needs/requirements at different points of time, an individual may allocate their funds in various forms of securities with different time frames. For Instance, if an investor requires amount within next 2 to 3 years, he/she may invest a major portion of funds in the debt securities. On the other hand, if an investor is willing to invest amount for a longer period of time, he/she may prefer to invest more money in equity.

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