Use your knowledge and experience to select three publicly traded U.S. companies.
- Make sure you are practicing good diversification. Diversification means you are not selecting three companies from the same industry. For example, you would not want to choose Target, Walmart, and Sam’s Club because they sell the same types of products. A better choice would be Amazon, Uber, and Kroger, because they sell different products and services.
- Determine how you will divide $25,000 across the three companies (for example, $10,000 in Company 1, $10,000 in Company 2, and $5,000 in Company 3).
- Decide the amount you are investing in each company. You need not provide any analysis to justify your decisions.
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- Provide a reason for picking each company.
- For example, you might invest in Ford because that company gets a lot of your money, and you hear that Ford is doing well and will continue to do well.
- Identify the number of shares you are buying and the price of the shares you are buying for each company.
- Once you decide the companies and the amount you will invest in each company, determine how many shares you can buy. For example, if Company 1 is selling for $42.16, then you may buy $10,000/$42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237 or 238. In this example, you buy 237 shares at $42.16 per share, investing $9,991.92. You will not be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.