What are the reasons which cause investor managing their portfolios passively to make changes their portfolios

Q: How do an investment's required rate of return vary with perceived risk? Explain with an example?

A: Required rate of return refers to the rate which the investors expects from their investments. This…

Q: How does the creation of a portfolio reduce risk? What type of assets should be included in a…

A: Introduction Portfolio: Any combination of financial assets, such as stocks, bonds, and currency, is…

Q: What is the expected return on a portfolio? How can the expected return on a portfolio be…

A: Expected Return on Portfolio  =( Weights of Stock 1 * Return of Stock 1) + ( Weights of Stock 2 *…

Q: What is meant by excessive portfolio turnover? Which behavioral bias is primarily responsible for…

A: Portfolio turnover is a measure of how quickly the management of a fund buy or sell shares over a…

Q: What is the difference between active and passive portfolio management

A: Active Portfolio management is process of managing assets which are created with the aim of…

Q: Describe how Investment Managers measure the non-systematic risk of their portfolio

A: Non-systematic risk refers to firm specific risk factors. This type of risk is usually eliminated or…

Q: What is risk, and how does it affect decisions about investment?

A: Risk and return are related to each other while making investment.

Q: Investigate the role of behavioral biases and market anomalies in challenging market efficiency.…

A: Market efficiency, a key concept in finance, suggests that financial markets incorporate all…

Q: What strategies are available to eliminate timing problems in investments? Explain Briefly

A: Introduction to Investments  Investment is referred to as the asset which is created with the…

Q: What kind of investment is considered to be risk-free?

A: A risk-free investment is an investment that has a minimum or no fluctuation from the expected…

Q: Why is it important to continuously manage and control your portfolio?

A: Portfolio management entails creating and managing a portfolio of investments that will fulfill an…

Q: Why do an investor need to know and understand Portfolio Management and how do they handle their…

A: Portfolio management is the process of selecting, prioritizing, and controlling an organization's…

Q: How does the diversification of an investor’s portfolio avoid risk?

A: Portfolio investments mean investments in the group of assets, securities, bonds, etc. Investments…

Q: How can an investor eliminate Unsystematic Risk?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk. Systematic risk is non…

Q: What is the relationship of risk to the investment?

A: There is a direct relationship between risk and return in investment decision making. It means…

Q: How do you perceive the relationship between risk and return in the context of investment…

A: The relationship between risk and return is a fundamental concept in finance and investment. In…

Q: Why should you apply smart methods to investments

A: Investments are the funds or money that are invested by the investors for the objective of…

Q: Describe how a portfolio manager may help to mitigate the impact of these risks on portfolio.

A: Portfolio manager is the individual or the group of people who is professional in his field,…

Q: Explain if the operational risk is considered a risk or uncertainty? Why? If it is a risk, how can…

A: Operational Loss:   The risk involved in failures of Man, Machine, Material, and Methods during…

Q: How can an investor eliminate Systematic risk?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk

Q: Which are the different assets that have the potential to be combined efficiently in a portfolio…

A: The efficient frontier graphically represents portfolios that maximize returns for the risk assumed.…

Q: 1.What is the relationship between an investment’s risk and its return? Please provide examples if…

A: Note:  As per our policy, we only answer one question, when more than one question is posted. The…

Q: a) Give the arguments for active portfolio management. b)What are the reasons which cause investors…

A: As you have asked question with multiple parts , we will solve the first 3 parts as per the policy…