Unformatted text preview: assets? a. Book value has to do with the value of assets, and claims on asset has to do with if the firm goes bankrupt. 4. When should a stockholder receive payment when a company declares bankruptcy? a. The stockholder is plain out of luck 5. Two ways an investor can reduce risk when purchasing stock a. Use Principle 1, The Risk Return Trade Off b. Use Principle 3, Diversification Reduces Risk i. Simply lets say you have $20,000, spread out that 20K so you don’t put all of your money into 1 jar....
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- Spring '11
- Personal Finance, Mr. McKenzie Personal, Matt Serna Mr. McKenzie, time common stocks, Diversification Reduces Risk