- Words: 5377
- Length: 15 Pages
- Topic: Economics
- Paper #: 3964936
Furthermore, the assumed 'cooperation' of these assets when put in portfolio maybe perceived differently by the manager than the reality will be which can lead to losses.
On the difficulties side, first of all, the opportunity cost of capital is the hardest assumption to be drawn. Opportunity cost of capital is the expected rated of return which could be achieved from investing in a business endeavor with the same risk.