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- Title
Taking the Plunge: A Case Study of Private Investments and Decision-Making.
- Authors
Samra, Yassir M.
- Abstract
Trust is an important part of doing business. The ability to trust someone to manage investment capital is not taken lightly. One of the advantages in publicly traded markets is the avoidance of liquidity risk. The capital markets continue to attract fresh capital as investors can liquidate quickly, however, private businesses can offer competitive returns, if not greater ones but often times require a locking up period much like a certificate of deposit. This paper suggests that investors aren't as concerned with liquidity risk since classic decision-making suggests that new investors are risk aggressive when losing as they hope for their principle to return. On the other hand, investors will forgo the liquidity risk if the returns are promising. Using this theory, an investment advisor decided to explore the results of investing in three privately held businesses based on trust.
- Publication
Proceedings of the Northeast Business & Economics Association, 2020, p132
- ISSN
1936-203X
- Publication type
Conference Proceeding