Question

Whether investment in secondary market is risky or not? Being a. Investor in which market you prefer to invest? How monetary policy control interest rate and inflation? Give example and reason in support of your answer( example is compulsory in this case)​

Answer 1

• Significant risks are associated with investment in secondary markets, with a primary risk being the adequacy of the income yield spread over income yields for similar assets in gateway markets
• High-yield savings accounts. ...  Certificates of deposit. Money market accounts.
• By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses.  Historically, the returns of the three major asset categories – stocks, bonds, and cash – have not moved up and down at the same time.  Market conditions that cause one asset category to do well often cause another asset category to have average or poor returns.  By investing in more than one asset category, you'll reduce the risk that you'll lose money and your portfolio's overall investment returns will have a smoother ride.  If one asset category's investment return falls, you'll be in a position to counteract your losses in that asset category with better investment returns in another asset category.

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Answer 2

Investment in secondary market and Monetary policy control

Explanation:

• Investment in secondary market is risky so as a wise investor we have to keep the portfolio diversified. Certain investors prefer discounted overdue that are still receiving payments. For example, If a person gets Rs1,00,000 loan with 50% discount, you only spend Rs50000 for the Rs100000 principal. This loan is a benefit to the investor so I will invest.
• Monetary policy control interest rate and inflation by reducing the money supply and employment. The bank charges high interest rates for the loans so businessmen suffer.

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How monetary policy control interest rate and inflation? Give example and reason in support of your answer

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