A personal financial advisor is helping a 70-year-old client make the safest investment for the client's age. It is the end of the month, and the advisor has a goal to sell $2,000 more of the company's product, whose returns fluctuate from month to month. Another option is to suggest the client invest in a U.S. Treasury security that gives low but steady returns. What is the appropriate ethical action for this advisor to take? Instruct the client to put $2,000 toward the company's product and the rest toward the U.S. Treasury security Direct the client to invest all money into the company's product Advise the client to invest in the U.S. Treasury security Provide an additional monetary incentive for the client to invest in th thy company's product A company is choosing between several similar projects with the same risk level. If the company wants to maximize the value it will create for shareholders, which project should it choose? A project that provides a lower return on investment than the firm's chosen discount rate A project that provides a return significantly higher than the hurdle rate A project in which the required return by investors is higher than the potential return on investment A project in which the opportunity cost is much greater than the potential returns An investor is considering investing in company stock. Because the stock is riskier than the return that could be earned investing in risk-free assets such as Treasury bonds, the investor requires a higher rate of return: an additional 5%. What does this additional 5% return represent? Real interest rate Risk premium Interest risk Nominal interest rate Why are investors compensated with interest? Because investors incur opportunity costs, take on risk, and lose purchasing power due to inflation Because it is unethical for firms to retain profits generated by investments, so they must disburse any profit to investors in the form of interest Because the SEC requires that investors be compensated to meet legal requirements Because interest is a form of wages that a firm must pay to anyone who invests in the firm Why are investors compensated with interest? Because investors incur opportunity costs, take on risk, and lose purchasing power due to inflation Because it is unethical for firms to retain profits generated by investments, so they must disburse any profit to investors in the form of interest Because the SEC requires that investors be compensated to meet legal requirements Because interest is a form of wages that a firm must pay to anyone who invests in the firm How should the return on an investment be expressed to investors so they can analyze the data about the investment? As an expected return As basis points As an annualized percentage As the holding period return A portfolio manager wants to increase or maintain client returns while mitigating their risk. What decision should this portfolio manager make to achieve this goal? Avoid risk by not choosing investments deemed to be too risky Transfer all investments to stocks in the industry with the most growth Move all investments to the United States where companies are more stable Purchase stocks that are similar and positively correlated with one another An individual is considering investing in a software company that provides 5% potential interest to shareholders. What does the potential interest of 5% on this investment represent? Historical return Risk Expected return Standard deviation