Description
Identify the key benefits of a company investing and trading securities List two (2) reasons investment diversification is important. Explain your rationale.
Explanation & Answer
Key benefits of a company investing and trading securities
a) Less Complicated as compared with direct investment
b) Lesser investment Required
c) Greater Liquidity
d) Better Investment portfolio management (More diversified investment)
e) Seperation of Ownership from Possession
f) easier transferable
(2) reasons investment diversification is important
Every investor/entrepreneur wants to maximize hsi/her profit and want
to minimize risk which is not possible so while investing in securities
there are lesser risk involved as compared with direct investment.
Secondly; securities investment allows the investor to manage the
portfolio more effectively they can invest in different kind of niches
and can gradually take adjustment to gain maximum out it.
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