investment diversification

User Generated

fzvyyr46

Business Finance

Description

Identify the key benefits of a company investing and trading securities List two (2) reasons investment diversification is important. Explain your rationale.

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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.



Anonymous
This is great! Exactly what I wanted.

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