. Shobhit has Rs50,000 for investment purposes. Should he invest in equity shares, preference shares, public deposits or debentures? Justify your answer.
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Answer:
Debentures because he will be guaranteed of expected return even if firm is incurring losses
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Here it depends on the level of risk he is ready to take and is it for long term or for short term investment ,according to it we diversify the portfolio
1) Equity has high returns & high risk and it is good for long term investment decision
2) preference shares are safe to invest where but returns are less and low risk
3)public deposits are safest among this very low return and highly secured
4)debentures are fixed rate of return
Here we can suggest
10,000 in equity, 15000 in preference shares , 10,000 in public deposits , 15,000 in dentures
1) Equity has high returns & high risk and it is good for long term investment decision
2) preference shares are safe to invest where but returns are less and low risk
3)public deposits are safest among this very low return and highly secured
4)debentures are fixed rate of return
Here we can suggest
10,000 in equity, 15000 in preference shares , 10,000 in public deposits , 15,000 in dentures
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