Investments are based on the belief that the rate of return justifies or compensates the investor for
the risk associated with that particular investment. The risk associated with this investment is
associated with the chance that a loss will be incurred. Or, to put it another way, the greater the
chance of a loss the riskier the investment. Therefore, some statistical measures of the risk
involved with an investment are necessary before the investment is made.
Address one of the following prompts in a brief but thorough manner.
• What is the Expected Rate of Return on an investment and what does it tell us about the
probability of the risk involved with a particular investment?
• In terms of risk, what are the advantages (and/or disadvantages) of a well-diversified
portfolio?
Your posting should be approximately 500 words in length.
SUBMISSION DETAILS:
• Submit your posting to the Discussion Area below by the due date assigned.
• Start reviewing and responding to the postings of your classmates as early in the week as
possible. Respond to at least two of your classmates. Participate in the discussion by
asking a question, providing a statement of clarification, providing a point of view with
a rationale, challenging an aspect of the discussion, or indicating a relationship between
one or more lines of reasoning in the discussion. Complete your participation for this
assignment by the end of the week.
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