Your good friend has recently inherited pound20000 and is

International Financial Markets

Formative Coursework Essay

Topic: Your good friend has recently inherited £20,000 and is planning to invest this money in financial instruments (equities, bonds, currencies). She has asked you for some guidance and advice, based on the following:

(i) Explain the meaning and benefits of ‘diversification in financial markets'.

(ii) Explain why your friend could suffer losses during a future financial crisis, even with a diversified portfolio of investments. Your essay must be strongly focused on giving evidence to support your arguments. This means using one or more textbooks, and using articles from academic journals.

The essay must include both theoretical and practical content. A minimum of five references from academic journals is expected.

You should ensure careful citation of all paper and electronic sources of information, and include a list of references. Citation and referencing will be a key factor in the marking. Feedback will be given on the structure and coherence of your essay.

Word limit: 1,200 words. State the word count on the cover page of your work.

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