Question 1: Explain each of the following FOUR (4) considerations when investing surplus cash: Risk, Maturity, Liquidity, Return.
Question 2: What are the advantages of investing in the common stock rather than the corporate bonds of a company? Compare the certainty of returns for a bond with those for a common stock.
Question 3: Briefly discuss why international diversification reduces portfolio risk. Specifically, why would you expect low correlation in the rates of return for domestic and foreign securities?
Question 4: Compare the liquidity of an investment in raw land with that of an investment in common stock. Be specific as to why and how the liquidity differs.