Answer only 2 question Q1. What is investment? How time value of money, inflation and expected riskeffects investment return and investment decision?Q2. Explain primary and secondary asset classes. Why this classification of assets isimportant?Q3. Explain the followingA) Measure of historical returns (Single Asset)B) Measure of historical returns (Portfolio)C) Measure of expected return and riskD) Coefficient of Variation (CV)

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What is investment? How time value of money, inflation and expected risk Q1. effects investment return and investment decision?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14MC: This calculation determines profitability or growth potential of an investment, expressed as a...

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

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Answer only 2 question

Q1. What is investment? How time value of money, inflation and expected risk
effects investment return and investment decision?
Q2. Explain primary and secondary asset classes. Why this classification of assets is
important?
Q3. Explain the following
A) Measure of historical returns (Single Asset)
B) Measure of historical returns (Portfolio)
C) Measure of expected return and risk
D) Coefficient of Variation (CV)

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Please answer 1and 2
Which method does not consider the time value of money? Choose the correct. A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability Index
Make a simple example of the following: a. Capital Gain (or Losses) b. Expected Return c. Real Return d. Risk-free Return e. Required Return f. Holding Period Return
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When adding real estate to an asset allocation program that currently includes only stocks, bonds, and cash, which of the properties of real estate returns affect portfolio risk? Explain.a. Standard deviation.b. Expected return.c. Correlation with returns of the other asset classes.
In general, the the correlation between asset returns, the the risk reduction that investors can achieve by diversifying. O a. lower; lower O b. greater; greater O c. lower; greater d. greater; lower
It is the uncertainty of future returns A. value B. speculation C. capital gain D.risk
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Which of the following is NOT a profitability ratio? Select one:a. Return on Equityb. Net Profit Marginc. Return on Assetsd. Average Collection Period