A hedge is an investment to reduce the risk of adverse price movements. A hedge is the strategy used to minimize the risk and maximize the return on an investment. It consists of taking an offsetting position in a related security.
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The strategy used to minimize the risk and maximize the return on an investment is called ____________.
John has 20,000toinvestinthreefunds{F}_{1},{F}_{2}and{F}_{3}.Fund{F}_{1}isoffersareturnof2{F}_{2}offersareturnof4{F}_{3}offersareturnof53000 in F3 and at least twice as much as in F1 than in F2. Assuming that the rates hold till the end of the year, what amounts should he invest in each fund in order to maximize the year end return?
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A retired person wants to invest an amount of Rs. 50,000. His broker recommends investing in two type of bonds A and B yielding 10% and 9% return respectively on the invested amount. He decides to invest at least Rs.20,000 in bond A and at least Rs.10,000 in bond B. He also wants to invest at least as much in bond A as in bond B. Solve this linear programming problem graphically to maximize his returns.
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shares provide a steady income in the form of a fixed rate of return but with low risk and safety investment.
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The evolutionary strategies developed by C4 plants are to
Explanation: A mutual fund is the type of investment that spreads the risk among a variety of investment types while also producing a good return. A mutual fund consists of a diversified group of stocks or bonds from different companies.
Asset allocation and portfolio diversification go hand in hand. Portfolio diversification is the process of selecting a variety of investments within each asset class, which can help those looking to reduce their investment risk.
The practice of spreading money among different investments to reduce risk is known as diversification. By picking the right group of investments, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.
Diversification is a strategy that aims to mitigate risk and maximize returns by allocating investment funds across different vehicles, industries, companies, and other categories.
Diversification is the spreading of your investments both among and within different asset classes. And rebalancing means making regular adjustments to ensure you're still hitting your target allocation over time.
Risk-return tradeoff is an investment principle that indicates that the higher the risk, the higher the potential reward. To calculate an appropriate risk-return tradeoff, investors must consider many factors, including overall risk tolerance, the potential to replace lost funds, and more.
By dividing up one's investments across many relatively low-correlated assets, companies, industries, and countries, it is possible to considerably reduce one's exposure to risk.
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