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Define Planning and Compare Formal and Informal Planning as They

question 147

Essay

Define planning and compare formal and informal planning as they are used in various organizations.


Definitions:

Risk Premium

The extra return expected by an investor for holding a risky asset compared to a risk-free asset, as compensation for the higher risk.

Diversifiable Risk

A type of risk that can be reduced or eliminated from a portfolio by holding a variety of investments.

Market Risk

The risk of losses in investments due to market conditions such as changes in interest rates, currency exchange rates, and stock prices.

Well-Diversified Portfolio

An investment portfolio that includes a mix of assets (stocks, bonds, etc.) to minimize risk and volatility.

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