A company that decides to invest all of its money in fixed deposits, rather than in government bonds, will have more decisions to make. At some point in time, the cash flow of the company will increase or decrease. If it increases, there might be further investment decisions, and a need to decide between various investment choices. Again, the easiest choice would be to go for the option that offers the highest rate of return. But what about putting all of your eggs in one basket? Shouldn't the company think about the need to diversify? Is the option of fixed deposits as attractive as last time? Interest rates might have moved, or the fixed term on offer could be different. And what about using the funds to expand, ...
A portfolio demands decisions
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