evaluate the following statement “iam going to increase the weight of equity because I have a...

evaluate the following statement “iam going to increase the weight of equity because I have a lot of growth opportunities but few assets in place.”

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Expert Solution

Increasing the weight of equity because of having a large amount of growth opportunity is related to investing into the growing companies which are listed into the marketplace but it is also reflecting that there are a few assets in place so so only growth opportunities can be represented through equities of these companies in the market and it may mean that equities are not listed of many companies who are growing so there are a large number of private companies who are not publicly listed and hence these companies are not having their ownership being created in the markets so investor cannot have exposure in the private companies and hence it can mean that there is a lack of offering of securities by various companies and it will also mean that being a few assets in place is also related to higher number of funds but lower number of investment opportunities in the equities.

It can also mean that the investor only want to have a exploration of growth opportunity through investment into a few assets because he does not want to diversify his funds into a large number of asset portfolio.

jeff jeffy answered 2 years ago

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