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Investor stock and Bond/bank loan

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Can an investor holding one stock earn a return commensurate with its risk?

Why is a bond preferable over a bank loan?

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This solution discusses investor stocks, bonds and bank loans.

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The response address the queries posted in 506 words with references.
As per the requirement of the paper, it will discuss that whether investor holding one stock earn a return commensurate with its risk or not. It will also discuss that why a bond is preferable over a bank loan.

Investor stock and Bond/bank loan

Can an investor holding one stock earn a return commensurate with its risk?

No, an investor holding one stock cannot earn a return commensurate with its risk. Risk can be minimized by holding the portfolios. A portfolio is a bundle or combination of individual assets or securities. The portfolio theory provides a normative approach to investors to make decisions to invest their wealth in assets or securities under risk. It is based on the assumption that investors are risk averse. This ...

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Ashish Sharma, MBA (IP)
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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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