A company's gearing ratio would rise if there was a decrease in its long-term loan balance that was greater than the decrease in its overall equity balance. This is because the gearing ratio is a measure of the company's debt relative to its equity.The correct answer is C.
If the long term loan balance decreases more than the equity balance, it means the company has less equity to offset its debt, which increases the gearing ratio. A decrease in long term loan balance that is less than the decrease in the overall equity balance would decrease the gearing ratio. Long term loan interest rates falling or rising would not affect the gearing ratio directly, but they would impact the company's interest expenses and profitability.
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A proprietor of an enterprise intends converting his business into a limited liability company. He also intends to have shareholders made up of 5 members as against 6 members proposed by his wife in a discussion. He has approached you as a postgraduate student in taxation to advise him on the relevance of the number of shareholders in a limited liability company setting. Required: Advise for tax planning purposes, the relevance of numbers of shareholders. (5 marks)
In advising the proprietor of an enterprise on the relevance of the number of shareholders in a limited liability company setting, for tax planning it is important to consider tax implications, control and decision-making preferences, ease of raising capital, and legal requirements.
1. Tax implications: The number of shareholders may impact the company's tax liability. Generally, a larger number of shareholders may provide an opportunity to distribute income more efficiently and lower the overall tax burden. However, this may vary depending on the local tax regulations.
2. Control and decision-making: The number of shareholders can also impact the level of control and decision-making within the company. With a smaller number of shareholders (e.g., 5 members), the proprietor may retain more control over the company's operations and decisions. However, having more shareholders (e.g., 6 members) may lead to more diverse perspectives and shared responsibility.
3. Ease of raising capital: The number of shareholders can affect the company's ability to raise capital. A larger number of shareholders may make it easier to raise funds through the issuance of shares, while a smaller number may limit the company's access to capital.
4. Legal and regulatory requirements: The number of shareholders may be subject to legal and regulatory requirements, which may impact the company's ability to operate as a limited liability company. It is essential to review local laws and regulations to ensure compliance.
In conclusion, the proprietor should weigh the advantages and disadvantages of having 5 or 6 shareholders in the limited liability company setting. The decision should be based on the specific tax implications, control and decision-making preferences, ease of raising capital, and legal requirements in their jurisdiction.
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According to the US Census Bureau, by 2060, one in three people in the United States population will be _______.
a. white
b. black/african American
c. asian
d. hispanic
The US Census Bureau predicts that by 2060, one in three people in the United States population will be D) Hispanic.
This is due to the large number of immigrants who have come to the United States in recent years, especially from Latin American countries. The Hispanic population is projected to increase from the current 18.8 percent to 31.2 percent.
Additionally, the white population is expected to decrease from the current 60.4 percent to 43.6 percent, while the African American population is expected to remain relatively stable at 12.4 percent of the population.
The Asian population is expected to increase from the current 5.9 percent to 8.2 percent of the population. Overall, it is predicted that by 2060, the US population will become more diverse, with a greater proportion of Hispanic people, as well as a larger proportion of Asian people.
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al and bill operate the only two barber shops in a small town. they might try to form a cartel to charge a high price for hair cuts. the payoffs represent their daily from charging high and low prices. which cell represents a nash equilibrium? question 7 options: a. b. c. d. question 8 (1 point)
The cell with the payoff of (Al: $100, Bill: $100) represents a Nash equilibrium.
In this cell, both Al and Bill have the same payoff and neither has an incentive to deviate from the cartel agreement. If one of them tries to lower the price, customers will flock to their shop and the other will increase its price to capture the additional customers.
This will result in both shops losing profits. Therefore, they will both stick to the agreement and charge a high price.
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Thomas and Kathryn estimate they will need $65,000 per year in retirement in today’s dollars.
amount required in account at time of requirement: $1,414,657.54
How much will they need to save at the beginning of each month to achieve their retirement goal if they expect to earn 6% annually on their investments prior to retirement?
retirement in 35 years
To achieve their retirement goal of $65,000 per year in today's dollars, Thomas and Kathryn will need to save $2,051.45 per month at the beginning of each month.
This assumes they will earn 6% annually on their investments prior to retirement. By investing this amount of money each month over the course of 35 years, they will be able to accumulate $1,414,657.54. This will provide them with the necessary funds to cover their retirement expenses for the next 35 years.
Investing for retirement can be a daunting task. The key is to start investing as early as possible and to stick to your plan. Thomas and Kathryn have made a wise decision to invest early and regularly in order to accumulate the necessary funds for retirement.
By making regular contributions over the course of 35 years, they will have enough money to cover their retirement expenses for the duration of their retirement. With careful planning and dedication, Thomas and Kathryn will be able to achieve their retirement goal.
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The market through which firms raise capital for investment projects is called the O a. Secondary market O b. Derivatives market O c. Primary market O d. Bond Market O e. Stock market
The market through which firms raise capital for investment projects is called the primary market (option c).
In the primary market, companies issue new securities, such as stocks and bonds, to investors. This helps firms generate funds for their business expansion and investment needs. The secondary market (option a) is where investors trade previously issued securities, while the derivatives market (option b) deals with financial contracts whose value is derived from underlying assets.
The bond market (option d) and stock market (option e) are part of the primary market, as they include the issuance of debt and equity securities respectively.
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Post earnings announcement drift suggests a violation of which form(s) of the Efficient Markets Hypothesis? Post earnings announcement drift: the tendency for a stock’s cumulative abnormal returns to drift in the direction of an earnings surprise for several weeks (even several months) following an earnings announcement. For example, if a firm announces disappointing quarterly earnings, its price will fall several weeks after the earnings announcement.
Semi-strong form
Strong form
Weak form
None of these
Post earnings announcement drift suggests a violation of the semi-strong form of the Efficient Markets Hypothesis. So, the correct option is Semi-strong form.
The semi-strong form of the Efficient Markets Hypothesis states that all publicly available information, including past trading information and public announcements, is already incorporated into stock prices, and thus investors cannot consistently achieve abnormal returns by trading on this information.
However, the post earnings announcement drift phenomenon demonstrates that there is a tendency for a stock's cumulative abnormal returns to drift in the direction of an earnings surprise for several weeks or even months after an earnings announcement, suggesting that the market does not instantly and fully incorporate the new information.
This contradicts the semi-strong form of the hypothesis.
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Take another look at the individual components of the Income
Statement. Which of these do you
believe you can influence and why? Be specific. For example, if
Gross Profit is too low, what can be
done
If gross profit is too low, one of the first things that can be done is to increase the prices of products or services. This will result in increased revenues and increased gross profit.
Additionally, reducing expenses can also help to increase gross profit. This can be done by cutting down on unnecessary costs such as advertising, or by renegotiating contracts with suppliers to get better deals. Another option is to focus on increasing the efficiency of operations, which can result in cost savings that can be used to increase gross profit.
Additionally, improving the quality of products or services can also result in increased gross profit, as customers are willing to pay more for a quality product or service. All of these strategies can help to increase gross profit and help to maximize the profitability of a business.
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the last two columns generally found on the right side of the worksheet are the income statement columns. question content area bottom part 1 true false
The statement "The last two columns generally found on the right side of the worksheet are the income statement columns" is true.
These columns are used to calculate and display the revenues and expenses of a business, ultimately determining its net income or loss for a given period of time. The income statement is an essential financial statement for any business as it provides insight into its profitability and overall financial health.
By analyzing the income statement, business owners and investors can make informed decisions about how to allocate resources, manage expenses, and improve revenue streams. It is important to note that the income statement columns are separate from the balance sheet columns, which are typically found on the left side of the worksheet.
While the balance sheet provides a snapshot of a business's assets and liabilities at a specific point in time, the income statement shows the financial performance of the business over a period of time.
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DVR, Inc. can borrow dollars for five years at a coupon rate of 2.75 percent. Alternatively, it can borrow yen for five years at a rate of .85 percent. DVR prefers dollar borrowing. The five-year yen swap rates are .64--.70 percent and the dollar swap rates are 2.41--2.44 percent. The current ¥/$ exchange rate is 87.575. Illustrate how currency swap helps DVR lower its dollar borrowing cost.
DVR takes out a loan of $10 million at a rate of 2.75 percent. Swaps can be used to borrow foreign currency at lower interest rates, speculate on currency movements, and hedge against exchange rate risk.
How would you work out cost of acquiring?Simple interest can be calculated using this formula: Interest is the sum of the principal, the rate, and the time, with time being the number of days lent divided by the number of days in a year. You will be responsible for $125.00 in interest over the course of a year if you take out a loan for $2,500.00 at a rate of 5%. 05 x 1). At a coupon rate of 2.75 percent, dollars can be borrowed for five years by DVR, Inc. It also has the option of borrowing yen for five years at a rate of 1.85%. DVR prefers to borrow in dollars. The swap rates for the five-year yen are 0.64-0.70%, while the swap rates for the dollar are 2.41-2.44%.
The value that individuals pay to acquire cash. Loan fee The expense of getting cash communicated as a level of the sum acquired (head).
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The "ideal" acid test ratio is deemed to be a. 3:1 O b. 2:1 O C. 1:1 O d. None of the options
The "ideal" acid test ratio is deemed to be 1:1, also known as the quick ratio.
This ratio measures a company's ability to pay off its current liabilities using only its most liquid assets, such as cash and marketable securities. It excludes inventory and prepaid expenses, which may not be easily converted into cash. A higher quick ratio indicates that a company has a better ability to meet its short-term obligations.
However, what is considered an ideal ratio may vary depending on the industry and the specific circumstances of the company. It is important to analyze the ratio in conjunction with other financial metrics to fully understand a company's liquidity position.
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A ______ forecasting model attempts to establish whether an explanatory variable influences the outcome of a response variable
residual
casual
A causal forecasting model attempts to establish whether an explanatory variable influences the outcome of a response variable.
This type of model is used to determine the cause-and-effect relationship between variables, with the goal of predicting how changes in one variable will impact the other variable.
The model establishes a causal relationship between the variables by controlling for other potential influences and identifying the specific effect of the explanatory variable on the response variable.
Causal forecasting models are commonly used in various fields, including economics, marketing, and social sciences, to understand and predict the impact of interventions or policy changes.
These models can be complex and require a deep understanding of the underlying causal mechanisms, as well as careful data collection and analysis.
Some popular techniques used in causal forecasting models include regression analysis, time series analysis, and experimental design.
By using causal forecasting models, researchers and practitioners can make more accurate predictions and informed decisions based on the expected effects of specific interventions or changes.
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Suppose a stock had an initial price of $61 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $69.
Requirement 1:
Compute the percentage total return. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Percentage total return: %
Requirement 2:
What was the dividend yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Dividend yield %
Requirement 3:
What was the capital gains yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Capital gains yield %
Suppose a stock had an initial price of $61 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $69.
Requirement 1: Compute the percentage total return.
Step 1: Calculate the capital gain by subtracting the initial price from the ending price.
Capital Gain = $69 - $61 = $8
Step 2: Calculate the total return by adding the capital gain and the dividend.
Total Return = Capital Gain + Dividend = $8 + $1.40 = $9.40
Step 3: Calculate the percentage total return by dividing the total return by the initial price and multiplying by 100.
Percentage Total Return = (Total Return / Initial Price) * 100 = ($9.40 / $61) * 100 = 15.41%
Percentage total return: 15.41%
Requirement 2: What was the dividend yield?
Step 1: Calculate the dividend yield by dividing the dividend by the initial price and multiplying by 100.
Dividend Yield = (Dividend / Initial Price) * 100 = ($1.40 / $61) * 100 = 2.30%
Dividend yield: 2.30%
Requirement 3: What was the capital gains yield?
Step 1: Calculate the capital gains yield by dividing the capital gain by the initial price and multiplying by 100.
Capital Gains Yield = (Capital Gain / Initial Price) * 100 = ($8 / $61) * 100 = 13.11%
Capital gains yield: 13.11%
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a group of small businesses constituting a single organization in order to spread health risks and negotiate more affordable health insurance is known as:
In order to combat the rising cost of health insurance, small businesses may band together to form a larger organization that can negotiate more affordable health insurance plans. This type of organization is known as a ""health insurance cooperative"" or ""health insurance alliance.""
Health insurance cooperatives are essentially groups of small businesses that come together to create a larger pool of individuals for insurance purposes. This allows the group to spread out the health risks among a larger population, which can help to reduce the overall cost of health insurance.
By banding together, these small businesses can also leverage their collective bargaining power to negotiate better rates with insurance providers. This can result in lower premiums and better coverage options for all members of the cooperative.
Health insurance cooperatives can be especially beneficial for small businesses, which may not have the bargaining power or resources to negotiate favorable insurance rates on their own. By pooling their resources and negotiating as a group, these small businesses can level the playing field and provide their employees with access to high-quality health insurance at an affordable price.
Overall, health insurance cooperatives are a powerful tool for small businesses looking to provide their employees with access to affordable health insurance. By working together, these businesses can spread out the health risks among a larger pool of individuals and negotiate better rates with insurance providers, ultimately resulting in better health outcomes for all involved.
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think about the different ways the chapter and video describe to organize an analytical report. which would you be using when you employ the direct approach to write for an audience who asked you for the report? a
In an analytical report, various organizational structures can be employed to present the findings effectively. These include the direct approach, indirect approach, chronological order, and topical order, among others.
Understanding Analytical reportWhen using the direct approach, you begin with the main conclusions or recommendations, followed by supporting evidence and analysis. This method is best suited for an audience that has specifically requested the report and is familiar with the subject matter.
In this case, you would be using the direct approach to write the report, as it caters to the audience's expectations and delivers the key findings upfront. This allows them to quickly grasp the report's main points, making it an efficient way to present the information.
Remember to maintain a professional tone, and provide accurate, concise details to support your conclusions or recommendations.
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which of the following are characteristics of repurchase agreements? check all that apply. their denominations are typically less than $10 million. there is no secondary market for repurchase agreements. banks and savings institutions are common borrowers and investors in repos, whereas money market funds are common investors in these agreements. the size of the repo market is approximately $10 trillion. suppose lucia initially purchased securities at a price of $9,810,000 while agreeing to sell them back to the original owner at a price of $10,000,000 at the end of a 6-month period. assuming a 360 day year, the yield (or repo rate) on this repurchase agreement is: 3.75% 3.87% 3.91% 4.14%
The repo rate is option b. 3.87%. The characteristics of repurchase agreement are:
- Banks and savings institutions are common borrowers and investors in repos, whereas money market funds are common investors in these agreements.
- The size of the repo market is approximately $10 trillion.
To calculate the yield or repo rate on a repurchase agreement, we need to use the formula:
Repo rate = (Interest paid / Purchase price) x (360 / Days to maturity)
In this case, the purchase price is $9,810,000 and the sell-back price is $10,000,000. The interest paid is the difference between the sell-back price and the purchase price, which is $190,000.
The days to maturity is 180 (since it's a 6-month period and we're assuming a 360-day year).
Using the formula, we get:
Repo rate = ($190,000 / $9,810,000) x (360 / 180)
Repo rate = 0.01936 x 2
Repo rate = 0.03872
So the repo rate is 3.87%. Therefore, the answer is: 3.87%.
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montana company was authorized to issue 200,000 shares of common stock. the company had issued 50,000 shares of stock when it purchased 10,000 shares of treasury stock. the number of outstanding shares of common stock was: multiple choice 190,000. 60,000. 40,000. 50,000.
There were 40,000 shares of common stock that were still outstanding. This figure represents the number of outstanding shares of common stock that are currently held by outside investors.
Option C is the appropriate response.
Shares that a business has issued and subsequently purchased back from the market are referred to as treasury stock. Since the firm itself holds these shares rather than outside investors, they are not regarded as outstanding shares. We must deduct the number of treasury shares from the total number of issued shares in order to arrive at the number of outstanding shares of common stock. In this instance, the business issued 50,000 shares of stock and then purchased 10,000 shares of treasury stock.
Therefore, the number of outstanding shares of common stock would be:
Outstanding shares = Issued shares - Treasury shares
Outstanding shares = 50,000 - 10,000
Outstanding shares = 40,000
The correct answer is option c 40,000.
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How long does a 40,000 note with 4.02% simple interest
have to run to equal 41,400?
A 40,000 note with a 4.02% simple interest rate has to run for approximately 87.06% of a year to equal 41,400. To determine how long a 40,000 note with 4.02% simple interest has to run to equal 41,400, you can follow these steps:
1. First, find the total interest earned: 41,400 (final amount) - 40,000 (initial amount) = 1,400.
2. Next, calculate the annual interest: 40,000 (principal) x 0.0402 (interest rate) = 1,608.
3. Divide the total interest earned by the annual interest to find the time required: 1,400 (total interest) / 1,608 (annual interest) ≈ 0.8706.
4. Convert the decimal value to a percentage: 0.8706 x 100 ≈ 87.06%.
5. Since the interest rate is annual, the time required is approximately 87.06% of a year.
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little corporation has pretax accounting income of $100,000. little has interest on municipal bonds of $9,000. depreciation for tax purposes is $4,000 greater than depreciation for financial reporting purposes. little paid life insurance on executive officers of $5,000. warranty expense was $10,000, and warranties paid for tax purposes was $8,000. calculate taxable income.
The taxable income for Little Corporation is $98,000.
How to calculate taxable incomeTo do this, we'll consider the pretax accounting income, municipal bond interest, depreciation differences, life insurance expense, and warranty expenses.
Pretax accounting income:
$100,000 Interest on municipal bonds is tax-exempt, so we do not need to include the $9,000 in the taxable income calculation.
Depreciation difference:
For tax purposes, depreciation is $4,000 greater than for financial reporting purposes.
This means we need to reduce the taxable income by $4,000.
Life insurance on executive officers: This $5,000 expense is not tax deductible, so we do not adjust the taxable income for it.
Warranty expense:
The difference between the warranty expense ($10,000) and warranties paid for tax purposes ($8,000) is $2,000.
Since the expense for tax purposes is less, we need to add $2,000 back to the taxable income.
Now we can calculate the taxable income:
$100,000 (pretax accounting income) - $4,000 (depreciation difference) + $2,000 (warranty difference) = $98,000.
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A difference between notes payable and accounts payable is that:Group of answer choicesaccounts payable are usually outstanding for longer periods of time than notes payable.accounts payable have an interest component but notes payable do not.notes payable are usually for smaller amounts than accounts payable.each note payable is supported by a legal document describing details about the company's promise to repay a loan, but accounts payable usually don't have this type of documentation.
A key difference between notes payable and accounts payable is that: each note payable is supported by a legal document describing details about the company's promise to repay a loan, but accounts payable usually don't have this type of documentation.
Notes payable typically involve formal agreements, like promissory notes, which detail the terms of repayment, including interest rates and due dates. They are often used for larger, longer-term loans or borrowings from financial institutions.
On the other hand, accounts payable represent short-term liabilities that a company owes to its suppliers or creditors for goods and services purchased on credit. These liabilities usually don't have formal legal documentation like notes payable, as they are often based on standard trade credit terms and agreements.
In summary, the main difference between notes payable and accounts payable is the presence of a legal document in the case of notes payable, whereas accounts payable typically do not have such documentation.
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Complete question:
A difference between notes payable and accounts payable is that:
a. accounts payable are usually outstanding for longer periods of time than notes payable.
b. accounts payable have an interest component but notes payable do not.
c. notes payable are usually for smaller amounts than accounts payable.
d. each note payable is supported by a legal document describing details about the company's promise to repay a loan, but accounts payable usually don't have this type of documentation.
the kind of learning that applies to voluntary behavior is called __________. group of answer choices classical conditioning marginal learning effective based learning instrumental conditioning
The type of learning that applies to voluntary behavior is called instrumental conditioning, additionally known as operant conditioning.
This type of gaining knowledge of takes place whilst an individual's behavior is shaped by the effects that follow it. If a behavior is followed by a high quality outcome, which includes a reward, it is much more likely to be repeated inside the future.
Conversely, if a behavior is accompanied by means of a poor consequence, which include punishment, it's far less probable to be repeated in the destiny. Instrumental conditioning may be used to train animals and human beings, and is broadly used in regions which includes education, parenting, and therapy.
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The type of learning that applies to voluntary behavior is called instrumental conditioning, additionally known as operant conditioning. This type of gaining knowledge of takes place.
whilst an individual's behavior is shaped by the effects that follow it. If a behavior is followed by a high quality outcome, which includes a reward, it is much more likely to be repeated inside the future. Conversely, if a behavior is accompanied by means of a poor consequence, which include punishment, it's far less probable to be repeated in the destiny. Instrumental conditioning may be used to train animals and human beings, and is broadly used in regions which includes education, parenting, and therapy.
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Felton Corp. will be found in violation of the Immigration Reform and Control Act, if it does not submit all completed Form I-9s to Immigration and Naturalization Service officers for approval.TrueFalse
True. The Immigration Reform and Control Act (IRCA) requires employers to verify the identity and employment eligibility of all employees hired after November 6, 1986, by completing Form I-9. Failure to comply with the IRCA requirements may result in fines and penalties.
Employers are required to keep Form I-9s for three years after the date of hire or one year after the termination of employment, whichever is later.
Felton Corp. could be found in violation of the IRCA if it fails to submit all completed Form I-9s to Immigration and Naturalization Service (INS) officers for approval. The INS is responsible for enforcing the IRCA and has the authority to request and review employer's Form I-9s to ensure compliance.
Employers who violate the IRCA may face civil and criminal penalties, including fines, debarment from government contracts, and even imprisonment. Therefore, it is crucial for employers like Felton Corp. to comply with the IRCA requirements and ensure that all Form I-9s are completed accurately and submitted to INS officers for approval.
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True. The Immigration Reform and Control Act requires employers to verify the employment eligibility of their employees by completing Form I-9 and submitting it to the Immigration and Naturalization Service for approval.
Failure to do so can result in violations and penalties. Felton Corp. will be found in violation of the Immigration Reform and Control Act if it does not submit all completed Form I-9s to Immigration and Naturalization Service officers for approval. This act requires employers to verify the identity and employment eligibility of their employees.
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I have 3 investment portfolios with 4 types of investments: stocks, bonds, t-bills, and hard assets/real estate. I am having a hard time calculating the weighted average and figuring out for each portfolio if the asset allocation is helping it or hurting it.
To calculate the weighted average of your investment portfolios, you need to determine the percentage of each type of investment in each portfolio and multiply it by the corresponding rate of return. Then, you can add up the products to get the weighted average rate of return for each portfolio.
To determine if the asset allocation is helping or hurting each portfolio, compare the actual rate of return with the expected rate of return based on the desired asset allocation.
If the actual rate of return is higher than expected, the asset allocation is helping the portfolio. If it's lower, the allocation is hurting the portfolio.
B. To calculate the weighted average rate of return for each portfolio, follow these steps:
Determine the percentage of each type of investment in the portfolio.
Multiply each percentage by the corresponding rate of return for that investment.
Add up the products to get the weighted average rate of return for the portfolio.
For example, if Portfolio 1 has 40% stocks with a 10% rate of return, 30% bonds with a 5% rate of return, 20% t-bills with a 2% rate of return, and 10% real estate with a 7% rate of return, the calculation would be:
(0.40 x 0.10) + (0.30 x 0.05) + (0.20 x 0.02) + (0.10 x 0.07) = 0.057 or 5.7%
To determine if the asset allocation is helping or hurting the portfolio, compare the actual rate of return (5.7%) with the expected rate of return based on the desired asset allocation.
If the desired asset allocation was, for example, 50% stocks with a 10% rate of return, 20% bonds with a 5% rate of return, 20% t-bills with a 2% rate of return, and 10% real estate with a 7% rate of return, the expected rate of return would be:
(0.50 x 0.10) + (0.20 x 0.05) + (0.20 x 0.02) + (0.10 x 0.07) = 0.069 or 6.9%
Since the actual rate of return (5.7%) is lower than the expected rate of return (6.9%), the asset allocation for Portfolio 1 is hurting its performance. Repeat this process for each portfolio to determine if their asset allocations are helping or hurting their performance.
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Over the past 150 years, the U.S. economy has endured a recession on average about every:
A) one to two years.
B) four to five years.
C) 10 to 15 years
D) 50 years
Over the past 150 years, the U.S. economy has endured a recession on average about every: B) four to five years. Thus, the correct answer is option B.
A recession is referred to a significant, widespread, and prolonged downturn in economic activity. Generally, recession can be calculated as:
two consecutive quarters of negative gross domestic product (GDP) growth mean recession, although more complex formulas are also used. Economists at the National Bureau of Economic Research (NBER) measure recessions by looking at nonfarm payrolls, industrial production, and retail sales, moving beyond the simpler two quarters of negative GDP measure.
Recessions are a normal part of the economic cycle, and they occur when there is a decline in economic activity for a period of time. The U.S. economy typically experiences a recession every four to five years, though the length and severity of each recession may vary. Thus, the correct answer is option B.
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Airline A’s demand curve is P(Q) = 120 – 0.2Q where Q stands for the airline’s output in number of seats. Assume all flights will be fully loaded. When a uniform price is charged, the marginal revenue will be MR(Q) = 120-0.4Q. The marginal cost of operating flights in the market is MC(Q) = 0.6Q and the total cost is C(Q) = 3000 + 0.3Q2.
(a) How much is the profit-maximizing output level? How much is the maximum profit that Airline A can earn?
(3 points)
(b) Comparing with Airline A, Airline B produces at a much higher output level with a lower average total cost. Therefore, a student concludes the following: (i) Airline B achieves a higher level of productivity than Airline A, (ii) Airline B can achieve a higher profit than Airline A, and (iii) economies of scale exists in airline industry. Do you agree with the above conclusions? Why?(3 points) - Pls help for this Economic Question, clearly steps and right answer will give you upvote!-
Comparing this to Airline B, which has a higher output level and lower average total cost, a student concludes that: (i) Airline B achieves a higher level of productivity than Airline A, (ii) Airline B can achieve a higher profit than Airline A, and (iii) economies of scale exist in the airline industry.
I agree with these conclusions because:
(i) Higher output level at a lower average total cost indicates that Airline B can produce more seats per unit of input, making it more productive than Airline A.
(ii) With a lower average total cost and higher output level, Airline B can potentially generate higher revenues while maintaining lower costs, leading to a higher profit compared to Airline A.
(iii) Economies of scale occur when an increase in production leads to a decrease in average total cost. Since Airline B can produce at a higher output level with lower average total cost, this suggests that economies of scale exist in the airline industry.
Airline B's higher output level and lower average total cost support the student's conclusions about productivity, profitability, and economies of scale in the airline industry.
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3. suppose mary (on her 30th birthday) has just inherited a large sum of money. rather than making equal annual payments, she has decided to make one lump sum deposit today to cover the entire cost of her retirement, how much would she need to deposit today to cover the anticipated withdrawals?
To cover her anticipated retirement withdrawals, Mary needs to make a lump sum deposit today for an amount that would depend on her expected expenses, investment returns, and life expectancy.
Several considerations must be taken into account to establish how much Mary needs to deposit today to pay her retirement costs. Her life expectancy, anticipated investment returns, and anticipated retirement costs are a few examples. In addition, one must account for inflation and unplanned costs.
Based on these considerations, a financial advisor can assist Mary in calculating the sum required to fund her projected withdrawals. Without these details, it is difficult to calculate the precise amount Mary needs to invest today to guarantee that her retirement is completely financed.
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20 pts Question 4 A bond has a maturity of 20 years, a coupon rate of 6% (paid annually), and a par value of $1,000. The risk-free rate is 1.25%. If you think the appropriate risk premium is 5%, what is the fair price of the bond? (Answer in dollars, let Canvas do the rounding) Question 5 20 pts The bond is in fact trading at $871. What is the risk premium on the bond according to the market? (Answer with a numerical value, such as 0.011, not 1.1%. Do not round, let Canvas do the rounding)
The present value of the bond can be calculated using the formula:
PV = (C / r) x (1 - (1 / (1 + r)^n)) + (F / (1 + r)^n)
Where:
PV = present value of the bond
C = annual coupon payment
r = discount rate (risk-free rate + risk premium)
n = number of years to maturity
F = face value (par value) of the bond
Substituting the given values, we get:
PV = (60 / 0.0625) x (1 - (1 / 1.0625^20)) + (1000 / 1.0625^20)
Therefore, the fair price of the bond is $1,029.16.
The risk premium on the bond according to the market can be calculated as follows:
Risk premium = (coupon payment / market price) - yield to maturity
Substituting the given values, we get:
Risk premium = (60 / 871) - (1.0625^20 - 1) / (2 x (1.0625^20 + 1))
Therefore, the risk premium on the bond according to the market is 6.97%.
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The move toward access instead of ownership is a sign of cognitive surplus. A. True B. False.
The move toward access instead of ownership is not necessarily a sign of cognitive surplus. The statement is False.
Cognitive surplus refers to the idea that individuals have free time and cognitive resources that can be used for productive activities beyond traditional forms of consumption, such as watching TV or playing video games.
The move toward access instead of ownership can be driven by various factors, such as changing consumer preferences, technological advancements, environmental considerations, or economic factors. It may not necessarily be directly correlated with cognitive surplus.
While cognitive surplus can potentially be utilized in productive activities, such as creating content, contributing to online communities, or engaging in creative pursuits, the move toward access-based models of consumption is not solely indicative of cognitive surplus.
It is a broader social and economic trend that is influenced by multiple factors.
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Answer three questions Max 100 words per question • No referencing required Paraphrase and use your own words in the answer - DO NOT COPY FROM WEBSITES . Due date: Thursday 7th March Question Question 2 What is the link between performance management and compensation? Demonstrate your answer with an example.
The relationship between performance management and compensation is based on the fact that pay is frequently correlated with employee performance. A bonus or pay rise could be given to an employee who performs better than expected, for instance.
As performance evaluation frequently serves as the foundation for setting remuneration, performance management and compensation are closely related. To assess an employee's performance on the job, productivity, and value to the company, businesses often utilise a performance management system. Managers might decide an employee's compensation, bonuses, promotions, and other awards based on the performance review.
For instance, an employee may be given a bigger wage raise or bonus than an employee who did not accomplish their goals if they routinely meet or surpass their performance targets. Similarly to this, if an employee continually performs below expectations, their wage rise, bonus, or chance of promotion may be reduced.
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5 pts consider a $1,000 par value bond with a 7% annual coupon. there are 20 years remaining until maturity. you have expectations that in 5 years the ytm on a 15-year bond with similar risk will be 7.5%. you plan to purchase the bond now and hold it for 5 years. your required return on this bond is 7.17%. how much would you be willing to pay for this bond today? (hint: find the expected bond value in 5 years)
You would be willing to pay $901.44 for the bond today.
We are required to find out how much you would be willing to pay for the $1,000 par value bond with a 7% annual coupon and 20 years remaining until maturity, considering your required return is 7.17% and the expected YTM on a similar 15-year bond in 5 years will be 7.5%.
In order to calculate the amount you would willing to pay, follow these steps:1. Calculate the bond's annual coupon payment:
Coupon payment = 0.07 * $1,000 = $70
2. Calculate the present value of the coupon payments for the 5-year holding period:
PV of coupon payments = $70 * [(1 - (1 + 0.0717)^-5) / 0.0717] = $291.64
3. Calculate the expected bond value in 5 years, when the YTM is 7.5% and there are 15 years remaining until maturity:
Expected bond value = $70 * [(1 - (1 + 0.075)^-15) / 0.075] + $1,000 / (1 + 0.075)^15 = $887.91
4. Calculate the present value of the expected bond value at the end of the 5-year holding period:
PV of expected bond value = $887.91 / (1 + 0.0717)^5 = $609.80
5. Add the present value of coupon payments and the present value of the expected bond value to find the price you would be willing to pay for the bond today:
Bond price = PV of coupon payments + PV of expected bond value = $291.64 + $609.80 = $901.44
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hich of the following are examples of the shortsightedness effect? check all that apply.during the last 45 years, the u.s. federal budget has been in deficit (annual tax revenue fell short of annual government spending) 40 times. in 40 of the past 45 years, the legislators that set the federal budget opted to incur future debts in order to finance current spending.
The shortsightedness effect refers to a situation where decision-makers prioritize short-term gains over long-term consequences.
In the provided example, the U.S. federal budget has been in deficit 40 times in the past 45 years. Legislators setting the federal budget chose to incur future debts to finance current spending. This is an example of the shortsightedness effect because the decision-makers prioritized immediate spending needs over the long-term consequences of accumulating debt.
The shortsightedness effect can also be observed in various other domains, such as personal finance, environmental policy, and health behaviors, where individuals or policymakers may prioritize short-term benefits or gains without fully considering the long-term consequences or costs of their decisions or actions.
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The shortsightedness effect describes a scenario in which decision-makers place short-term profits ahead of long-term repercussions.
In the example given, the federal budget of the United States has been in deficit 40 times in the last 45 years. Legislators who established the government budget decided to incur future debts in order to pay present spending. Because decision-makers prioritized present spending demands over the long-term repercussions of debt accumulation, this is an example of the shortsightedness effect.
Individuals or policymakers may prioritize short-term benefits or gains without fully considering the long-term consequences or costs of their decisions or actions in a variety of other domains, such as personal finance, environmental policy, and health behaviors, where the shortsightedness effect can also be observed.
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