please help will give thumbs up!!
Q. 5. The profit (ie. Net Income) of a corporation is often not sufficient to finance all of its projects. In such a case, as one option, the corporation may sell Bonds to the public in order to raise capital for funding its projects. The U.S. federal government (like the governments of other nations) does something similar - it finances the deficit (i.e., the amount it needs to finance various projects like Medicaid, Medicare, unemployment compensation, education, defense, bailouts, etc. minus its income i.e., taxes) via the issue of treasury bills and bonds (currently this amounts to over $27 trillion). Many people start to howl when a government (federal or local) runs a deficit and has to finance it via issue of bonds, but no one seems to complain when companies sell bonds for financing their projects. Based on the material covered in this class provide your argument for why it may be O.K. for corporations to incur deficits but not for governments? (6 points) 6. A. Draw the relationship between the riskiness of the portfolio and the number of stocks in the portfolio (label the diagram completely). (7 points) B. Based on the VC Matrix for finding the riskiness of the portfolio, explain why we observe the above relationship Q. 5. The profit (ie. Net Income) of a corporation is often not sufficient to finance all of its projects. In such a case, as one option, the corporation may sell Bonds to the public in order to raise capital for funding its projects. The U.S. federal government (like the governments of other nations) does something similar - it finances the deficit (i.e., the amount it needs to finance various projects like Medicaid, Medicare, unemployment compensation, education, defense, bailouts, etc. minus its income i.e., taxes) via the issue of treasury bills and bonds (currently this amounts to over $27 trillion). Many people start to howl when a government (federal or local) runs a deficit and has to finance it via issue of bonds, but no one seems to complain when companies sell bonds for financing their projects. Based on the material covered in this class provide your argument for why it may be O.K. for corporations to incur deficits but not for governments? (6 points) 6. A. Draw the relationship between the riskiness of the portfolio and the number of stocks in the portfolio (label the diagram completely). (7 points) B. Based on the VC Matrix for finding the riskiness of the portfolio, explain why we observe the above relationship
