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Part 3: Risk Management Financial risk management can be distilled into two issues: position...

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Finance

Part 3: Risk Management

Financial risk management can be distilled into two issues: position size and money management. Briefly identify the single most important risk consideration these two issues address and, then, explain how they do it

Briefly explain the "Theory of Runs" and how it can apply to investment decision-making

Briefly explain how the "Martingale" system can be integrated with the "dollar-cost averaging" and, then, explain one advantage and one disadvantage of using this approach as an investment strategy

An Investment Policy Statement states that "if the equity portion of the Investment Portfolio loses more than 25% from the beginning year value, all equities must be liquidated and held in a cash position for the rest of the year." Explain why this is easier to implement in a corporate account than it is to do it in a personal account.

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