Week 2 discussion 1 Assignment Example | Topics and Well Written Essays - 750 words

Week 2 discussion 1 - Assignment ExampleFixed incomes ar also invested in the forms of bonds, where investors are paid a set rate of interest on their champion over a given period of time (Farris, Neil, Phillip and Reibstein, 2010). Depending on the period of investment, fixed income has been used for both short term and long term investment and also as important methodologies for maintaining portfolio risks (Kane and Marcus, 2011). Once this is done, the major(ip) concentration of investors is on currency shocks, when bond investments are made in foreign currency.Given how respective(a) the business environment that exists in Kuwait is, diversification is something that is very possible for investors. This is because there are as many investment avenues as possible that investors who prefer diversification may look into. In all told cases, there are two major options. The first is for those who want to undertake cross-sectional diversification, where they engage in investments i n two opposite asset areas (Khan, 2013). There also exists longitudinal diversification, where investors may choose different forms of investments in the same asset area. In comparing the use of equity to fixed income, it would be illustrious that those enmeshed in equity start out more opportunity to longitudinal diversification as compared to those engaged in the use of fixed income. This is because with those engaged in equity, there continues to be impressive performances of companies on the shopworn exchange that command investor confidence and making diversification strategies optionally abundant.Money food market may non be considered as totally missing in Kuwait but its popularity is very minimal, less preferred and relatively unpopular. This is not because the money market does not have the needed potential to guarantee revert on investment, as money market is noted to be one of the safest liquid investments (Kotler, 2006). Money market is rather not popular in the country because of its short term nature. In the country, most investors have been