Florence is CIO of a multibillion-dollar home office for the Nelson family. She is discussing...

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Accounting

Florence is CIO of a multibillion-dollar home office for the Nelson family. She is discussing the revision of the governing investment policy statement to permit the investment in distressed securities. Susan Nelson represents the family in policy matters. Susan Nelson states: Distressed securities sound like a very-high-risk investment strategy because the strategy focuses on companies with high risk of bankruptcy. Is that why few investors choose to invest in distressed securities? What are the origins of distressed securities, and how are investors involved?

Discuss the suitability of investing in distressed securities for institutional investors and evaluate the participation of analysts in researching distressed securities. (150 words)

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