What is the role of capital markets toa. investors and business?

Question

2. what is a portfolio in the context of investment?
3. how do investors compute performance of a stock investment?
4. what is a stock index?
5. why do investors demand an equity premium?
6. how does the standard deviation help predict the range in which a stock portfolio will perform?
7. why do you suppose riskier ventures have to provide a higher yield?
8. why would an investor consider buying a highly risky security under the Modern Portfolio Theory of Markowitz?
9. why does diversification of securities beyond two help reduce overall risk to a portfolio?
10. would combining T-bills with a portfolio investment provide any benefits in terms of:
a. diversification
b. lower risk

Answer 1

I recommend that you pose each question separately. You're more likely to get people willing to answer.

I'll answer #1:

An investment portfolio is the sum of all holdings from the fund or individual. Examples are stocks, bonds, real property, and cash or cash equivalents.