We would not expect a Japanese financial asset and a U. S. financial asset with identical risk, liquidity, and information characteristics to have different expected returns because A. traders would buy the asset with the higher expected yield and sell the asset with the lower expected yield until the yields were brought into equality. B. traders would sell the asset with the higher expected yield and buy the asset with the lower expected yield until the yields were brought into equality. C. the U. S. and Japanese governments have pledged themselves to avoid this outcome. D. the exchange rate between the dollar and the yen would adjust automatically to eliminate any difference in yields.

Question

Business

Zane Yates

23 August, 12:38

We would not expect a Japanese financial asset and a U. S. financial asset with identical risk, liquidity, and information characteristics to have different expected returns because A. traders would buy the asset with the higher expected yield and sell the asset with the lower expected yield until the yields were brought into equality. B. traders would sell the asset with the higher expected yield and buy the asset with the lower expected yield until the yields were brought into equality. C. the U. S. and Japanese governments have pledged themselves to avoid this outcome. D. the exchange rate between the dollar and the yen would adjust automatically to eliminate any difference in yields.

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Answers (2)

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Kade Bruce · Answer 1

A. traders would buy the asset with the higher expected yield and sell the asset with the lower expected yield until the yields were brought into equality.

Cunningham · Answer 2

B. traders would sell the asset with the higher expected yield and buy the asset with the lower expected yield until the yields were brought into equality.

Explanation:

"The role of an asset manager consists of determining what investments to make, or avoid, that will grow a client's portfolio. Rigorous research is conducted utilizing both macro and micro analytical tools. This includes statistical analysis of the prevailing market trends, interviews with company officials, and anything else that would aid in achieving the stated goal of client asset appreciation. Most commonly, the advisor will invest in products such as equity, fixed income, real estate, commodities, alternative investments and mutual funds."

Reference: Ganti, Akhilesh. "Asset Management Definition." Investopedia, Investopedia, 31 Mar. 2019