Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- In 2021, the Gamestop stock witnessed a sudden rally when a group of Subredditors on r/wallstreetbets decided to attack the hedge fund managers who were short on the stock, and thus aimed to shake the very foundation of Wall Street. The Subreddit influenced many ordinary people to buy the Gamestop stock via the Robinhood App leading to enormous losses for the hedge fund managers who had bet on the price to fall, as the price went up by whopping 1700% in a single week. Your friend exclaims: "I would never buy these trending stocks; their price is too volatile, as a single tweet or a comment thread may lead to the soaring or the plummeting of the prices in a jiffy; in other words, these stocks are too risky and useless for rational investors, they’re just good for regular social media followers and for those people who don’t know anything about finance but are just in to gamble!". How would you reply to such a line of reasoning?arrow_forwardlist K mediums: a stock fund, a bond fund, and his own Sports and Casino Investment Plan (SCIP). The stock fund is a mutual fund investing in op traded stocks. The bond fund focuses on the bond market, which has a Table of Returns, Variances, and Covariances Average return Variance Covariance with stock Covariance with bond Stock Bond 0.148 0.06 0.014697 0.000155 0.000468 SCIP 0.152 0.160791 -0.002222 -0.000227 D - Xarrow_forwardWhich of the following is a reason why an investor would place a stop buy order on a stock? To ensure a short position is closed out for profit To ensure that the broker executes immediately at the current market price To ensure the stock is sold before its price falls to a specified level To ensure the stock is purchased when its price is risingarrow_forward
- As the economy goes through highs and lows, investors with stock in various companies can face significant risk, and significant benefits. How do you see the stock market affecting your own investing plans in the future? What types of risks do investors take? Do you have any companies you follow thru their stock prices?arrow_forwardMicrosoft is the only stock in your portfolio. To reduce the risk you decide to add another stock in your portfolio. In fact you pick another stock that has a correlation coefficient of 1 with Microsoft. Which risk do you reduce by adding the second stock to your portfolio? O A. Systematic risk O B. Company specific risk O C. Risk free rase risk O D. Technology risk OE. None of the abovearrow_forwardPlease answer in 10 minute just need final answer not explanationarrow_forward
- Hedge Funds have become an increasingly popular investment options over the past 15 years, with managers making bold statements about the benefits of investingwith hedge funds. List the three main benefits that are claimed to arise when investing in a hedge fund. Do you believe that these benefits exist?arrow_forwardA long-term investor has recently become concerned that the shares of a large stock holding will decline significantly in the short term. What type of order might the investor most likely consider placing to try to protect against such a decline? Fill or kill stop-loss buy order. Good-till-canceled limit buy order. Good-till-canceled limit sell order. Good-till-canceled stop-loss sell order. Good-till-canceled stop-loss buy order.arrow_forwardAbswer with detailed steps. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
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