ACTSC_372_Assignment_Four_Spring_2010

ACTSC_372_Assignment_Four_Spring_2010 - Why or why not?...

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Assignment 4 – ACTSC 372 Due July 28 th at noon in the drop boxes 1) Discuss two reasons why people trade too much? 2) What is the impact to a person’s portfolio when they trade too much? 3) Why would a 90 year old person likely not want to have a portfolio that is high risk and heavily weighted into stocks that provide much of their return in the form of capital gains? 4) Behavioural finance tries to reconcile the theoretical underpinnings of the market and what really happens. Discuss one reason why it does and one reason why you feel it may not. 5) It is said that dividend policy is irrelevant but dividends 6) If you were a bond holder of a company, and you read that the company was planning to issue a liquidating dividend, would you care?
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Unformatted text preview: Why or why not? What is a liquidating dividend? are not? What does this mean? 7) You own stock of Company ZZZ. ZZZ wants to reward its shareholders. Would you prefer to have a company repurchase your stock, or provide a stock or cash dividend? Why do you feel the way you do? 8) Dividends are taxed differently that capital gains, but if the tax system is working appropriately, should we have a preference between the two types of gains? In reality do some people prefer one over the other? If so, what sort of people prefer dividend and what sort of people prefer capital gains? 9) Describe one recent trend in finance that was discussed in class. Why is this particular trend important to the investments field?...
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