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What are two motivations to sell an asset, even if the current value is less than what you paid for it?

A. You want to buy new assets that are performing well currently.
B. You want to diversify the types of assets that you own.
C. Your assets are increasing in value.
D. You want to buy shares in the company you work for.
E. You want your portfolio to include some shares in international companies.



Answer :

GinnyAnswer

Final answer:

Motivations to sell an asset at a loss can include diversification and investing in international markets.


Explanation:

One motivation to sell an asset, even if the current value is less than what you paid for it, is when you want to diversify the types of assets that you own. By selling an asset that is underperforming, you can allocate your resources into different types of assets, reducing overall risk.

Another motivation could be that you want your portfolio to include some shares in international companies. This move is based on the belief that investing in international markets can provide opportunities for growth and diversification, despite a current loss on a particular asset.

Notably, selling an asset to buy shares in the company you work for may not be a typical motivation when the asset is performing poorly, as it would concentrate your investment risk in one company rather than diversifying, which is generally recommended for managing risk in a portfolio.


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