Discuss whether a commercial bank should specialize or diversify in terms of the services it provides.

Answers

Answer 1

Answer:

The authors find that sector specialization has an overall positive effect on banks' performance. In contrast, Bebczuk and Galindo (2007) find for Argentina that banks with a diversified credit portfolio have fewer non-performing loans.

Answer 2

A concentrated portfolio with a high risk level results from concentrating on portfolio growth without adding additional asset classes.

What is a portfolio?

A portfolio is a collection of financial assets, such as securities, bonds, commodities, cash, and cash equivalents, such as closed-end funds and exchange-traded funds (ETFs).

Most people think that a portfolio's core consists of equities, bonds, and cash. Although this is frequently the case, it need not be the exception. Various types of assets, such as private investments, real estate, and fine art, may be included in a portfolio.

The wisdom of diversification, which essentially means not putting all of your eggs in one basket, is one of the fundamental ideas in portfolio management.

By distributing investments among different financial instruments, industries, and other categories, diversification aims to lower risk. By making investments in many sectors that would all respond differently to the same occurrence, it seeks to optimize returns.

The strategy of a hybrid portfolio diversifies among asset classes. Investing in stocks, bonds, commodities, real estate, and even art are all necessary components of creating a hybrid portfolio.

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Related Questions

Accounts receivable, equipment, the building itself, and the land on which the building stands are examples of:

Answers

Answer: Assets

Explanation:

Assets are something that a business owns that is able to bring in money or is a store of value.

All the above mentioned items are considered assets as they fit this description.

Accounts receivable is a current asset which means it has a duration of a period or less.

Equipment, building and land are all fixed assets as they have a duration of more than one period.

A. A plan for mass casualty incidents should include protective actions to reduce vulnerabilities, response actions to minimize negative consequences, and post incident actions to promote community recovery. B. A partnership approach to planning for mass casualty incidents helps to ensure that the plans for your organization are compatible with those of the agencies that would respond if an incident occurred. C. When an organization is planning for mass casualty incidents, an effective approach is to request law enforcement personnel to develop a separate plan for mass casualty incidents for the organization. D. It is important to customize your emergency plan to reflect the risks, realities, and resources that characterize the local area and your own organization.

Answers

Answer: When an organization is planning for mass casualty incidents, an effective approach is to request law enforcement personnel to develop a separate plan for mass casualty incidents for the organization

Explanation:

A Mass Casualty Incident refers to an overwhelming event, which leads to more patients at a time than what the available resources can easily manage such that it requires additional assistance.

A plan for mass casualty incidents should include protective actions that will be used to reduce vulnerabilities, response actions to minimize negative consequences, and post incident actions to promote community recovery.

A partnership approach to planning for mass casualty incidents is important as it helps in ensuring that the plans for your organization are compatible with those of the agencies that would respond if an incident occurred.

It's also vital to customize your emergency plan to reflect the risks, realities, and resources that characterize the local area and your own organization.

The false statement is "When an organization is planning for mass casualty incidents, an effective approach is to request law enforcement personnel to develop a separate plan for mass casualty incidents for the organization". This isn't true.

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