Question

Obtain several recent issues of The Wall Street Journal or Bloomberg Businessweek. Identify, read, and be discuss at least one article relating to one of the six principles of finance. Cite the date and name of the article.

Answer 1

Issue Related to the Bloomberg Business Week:

A revamped Bloomberg Businessweek magazine rolls out beginning Thursday, the most dramatic signpost of change since financial-information firm Bloomberg L.P. bought the struggling magazine in December.

The relaunch is a cornerstone of Bloomberg's fledgling campaign to broaden its audience and sources for its empire, which also includes a news service, TV channel and Web site. Businessweek also presents a management challenge as Bloomberg digests one of the few acquisitions in its nearly 30-year history.

McGraw-Hill Cos. agreed to sell BusinessWeek to Bloomberg L.P., marking the growing media ambitions of its new owner and a retreat for McGraw-Hill after 80 years of owning of the business magazine.

The purchase price wasn't disclosed, but people familiar with the matter say Bloomberg agreed to pay nearly $5 million and take responsibility for more than $10 million in liabilities, including severance for BusinessWeek staffers who might lose their jobs.

There are six core principles of finance:

1. The Principle of Risk and Return
2. Time Value of Money Principle
3. Cash Flow Principle
4. The Principle of Profitability and liquidity
5. Principles of diversity and
6. The Hedging Principle of Finance

ARTICLE by bloomberg

High Risk, High Returns? Not Quite.

If anything, it's just the opposite.

By

Noah Smith

August 20, 2015, 5:30 PM GMT+5:30

For many years, investors have been told that risk and return are correlated. In a broad sense, history seems to bear that out -- the stock market, which fluctuates a lot more than the bond market, has yielded higher long-term returns. In a narrow sense, this principle -- the risk-return tradeoff -- is the basis of almost all academic theories of the value of financial assets. It makes sense, after all -- if something is risky, people generally won't buy it unless it also offers chances for big winnings.

But how do you measure the riskiness of an asset? Finance theorists say that risk comes from big, broad factors, like the swings in the overall market. For example, take the capital asset pricing model, or CAPM. This is the most common and universal asset-pricing theory -- it garnered a Nobel Prize in economics, and it's where we get the terms "alpha" (marketing-beating returns) and "beta" (market-matching returns). This theory says that since you can diversify your portfolio, an asset's fluctuations don't really matter unless they also coincide with the fluctuations of other assets. If one of your stocks crashes but the other 39 do fine, you're safe, as long as that one stock wasn't a huge chunk of your portfolio. But if all 40 of your stocks crash together, you're in trouble (especially if you have to retire soon). An asset's true riskiness, therefore, is the degree to which it swings up and down when the whole market swings up and down.

Discussion:

As per this Article by Diversifying the Portfolio the Risk can be reduced and also Higher return should be Generated,