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What are the key differences between debt securities and loans in terms of risk and return potential?
Debt securities and loans differ in terms of risk and return potential. Debt securities are typically traded on the market and are subject to market fluctuations, making them more liquid but also more volatile in terms of returns. Loans, on the other hand, are usually less liquid and have a fixed interest rate, offering more stability in returns but also less potential for high returns. In terms of risk, debt securities are generally considered to be riskier than loans due to their exposure to market fluctuations, while loans are considered to be more secure as they are typically backed by collateral.
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What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
What are the different types of debt securities available for investment?
The different types of debt securities available for investment include government bonds, corporate bonds, municipal bonds, and treasury bills. These securities represent loans made by investors to governments or companies in exchange for regular interest payments and the return of the principal amount at maturity.
What is the relationship between risk and return in investment decisions?
The relationship between risk and return in investment decisions is that generally, higher returns are associated with higher levels of risk. Investors must weigh the potential for greater returns against the possibility of losing money when making investment decisions.
Difference between returns to scale and constant return to scale?
differentiate between returns to scale and constant return to scale
What is the difference between law of return to variable proportion and law or return to scale?
There is a big difference between both the laws.The basi difference between them is that i dont know 1st but i know the 2nd one
How do you calculate risk - free return?
Risk free rate of return or risk free return is calculated as the return on government securities of the same maturity.
Are money markets securities characterized by low rates of return?
yes
What are the types of finance primary market?
New securities by the borrower in return for cash from investors(or lenders).
How is the potential rate of return on investments related to the level of risk?
Higher risk investments have a higher potential return.
Why do people invest in fixed income securities?
Main purpose of investing in fixed income securities is regular flow of return. It also has lower risk when compared to investment in shares/stocks.
What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
Strathclyde Associates topic Are securities similar to stocks?
Securities is the generic name for shares and other investment tools quoted on the stock market. Individuals may invest in securities, and check the progress of their investment every day in the newspapers or on the Internet. It is possible to enjoy a higher rate of return from investing in securities than from savings accounts.
What word has betas in it?
betas. it relates the responsiveness of the returns on individual securities to variations in the return on the overall market portfolio
The higher the potential return the?
higher the risk for an investment
What is the earning potential on your savings?
Rate of return
What English word has 'Beta' in it?
betas. it relates the responsiveness of the returns on individual securities to variations in the return on the overall market portfolio
Why common stock called Variable income securities?
The common stock is called variable income securities because the rate of return of common stock is determined by market and hence the returns continuously changes with the market dynamics.
