During last assignment, you did such an amazing job with Frank's finances, that he is retaining you as his financial consultant. Thanks to you, Frank's financial house is in excellent order. He is utilizing his monthly cash flow plan, and all of his debts have been paid off. except for a house, which he recently purchased with a mortgage, and he has established a very healthy emergency fund to help handle unexpected events in the future. Frank is in the position to set aside $400/month for investing purposes. Of course, he has absolutely no idea how to proceed, and is turning to you for your outstanding knowledge in this area. 1. One of the first things Frank should understand about investing money is the concept of risk. Explain in detail the five components of the risk factor. 2. Now that Frank has a better understanding of the concept of risk, he would like to try to reduce the risk of his future investments. Frank needs you to outline a strategy of the factors that reduce investment risk. 3. Frank has been told that common stock is at the heart of the United States business economy. Explain to Frank the reasons why corporate managers use common stock as the preferred method of corporate financing. 4. Some co-workers of Frank are constantly talking about the stocks that they buy and sell on a weekly basis, and Frank is very overwhelmed at the amount of stock transactions that his friends go through during a given week. Frank feels that he will have trouble making the decision to buy or sell a certain stock. Give Frank some suggestions that can reduce his anxiety when he makes stock investment decisions. 5. This information has been a great help for Frank-you are good! Frank now needs an investment strategy for the stocks that he will purchase. Provide Frank an analysis of both a long-term and a short-term investment strategy for his stocks.