The portfolio manager and investment cannot increase the position of A Corp to reduce their market risk exposure, as A Corp and B Corp have a negative correlation.
a) The 1-day 99% VaR of A Corp can be calculated as:
VaR = 100,000 x 0.35 x [tex]\sqrt{(1/252)}[/tex] x 2.33 = £12,961
Similarly, the 1-day 99% VaR of B Corp can be calculated as:
VaR = 75,000 x 0.22 x [tex]\sqrt{(1/252)}[/tex] x 2.33 = £7,797
b) The 1-day 99% Expected Shortfall (ES) of A Corp can be calculated as:
ES = 100,000 x 0.35 x [tex]\sqrt{(1/252)}[/tex] x (norm.pdf(norm.ppf(0.99)) / 0.01) = £19,742
Similarly, the 1-day 99% ES of B Corp can be calculated as:
ES = 75,000 x 0.22 x [tex]\sqrt{(1/252)}[/tex] x (norm.pdf(norm.ppf(0.99)) / 0.01) = £10,912
c) To calculate the 1-month VaR and ES of A Corp and B Corp, we need to scale the 1-day VaR and ES by the square root of 20 (assuming 20 trading days in a month). Therefore:
1-month VaR of A Corp = £12,961 x [tex]\sqrt{20}[/tex] = £29,082
1-month VaR of B Corp = £7,797 x [tex]\sqrt{20}[/tex] = £17,475
1-month ES of A Corp = £19,742 x [tex]\sqrt{20}[/tex] = £44,262
1-month ES of B Corp = £10,912 x [tex]\sqrt{20}[/tex] = £24,436
d) The 1-month 99% VaR of the portfolio can be calculated as the square root of the sum of the squared VaRs of the two positions, adjusted for the correlation:
Portfolio VaR £50,538
Similarly, the 1-month 99% ES of the portfolio can be calculated using the same formula but substituting the VaRs with the ESs:
Portfolio ES = (2 x 44,262 x 24,436 x (-0.6))) x (norm.pdf(norm.ppf(0.99)) / 0.01) = £70,114
e) The 1-month 99% marginal VaR of each position can be calculated as the difference between the portfolio VaR and the VaR of the portfolio without that position:
Marginal VaR of B Corp = (2 x 17,475 x 29,082 x (-0.6))) x 2.33 = £35,863
f) The portfolio manager cannot increase the position of A Corp to reduce their market risk exposure, as A Corp and B Corp have a negative correlation.
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Correct Question:
A portfolio manager has positions that include a £100,000 investment in A Corp and a £75,000 investment is B Corp. The position in A Corp has standard deviation of gains and losses of 35% per annum whilst the position in B Corp has standard deviation of gains and losses of 22% per annum. Gains and losses for both A Corp and B Corp are normally distributed while the returns A Corp and B Corp have correlation -0.6 (minus 0.6). When necessary, assume 252 trading days in the calendar year.
a) Calculate the 1-day 99% VaR of A Corp and of B Corp
b) Calculate the 1-day 99% Expected Shortfall (ES) of A Corp and of B Corp
c) Using your answers to (a) and (b) calculate the 1-month VaR and ES of A of B Corp.
d) Calculate the 1-month 99% VaR and ES of the portfolio
e) Calculate the 1-month 99% marginal VaR of each position. Interpret your
f) Can the portfolio manager increase the position of A Corp to reduce their market risk exposure? Justify your answer
g) What is the component VaR of each position?
h) What would be the advantages and disadvantages of using Expected Shortfall rather than Value at Risk to measure the risk of this portfolio
how have the new directions in planning affected companies? they have made more strategic planning longer-term in orientation, typically planning 5 to 10 years into the future.
The new directions in planning have significantly impacted companies by making them more strategic. Rather than focusing solely on short-term goals and objectives, companies are now considering longer-term planning, typically spanning 5 to 10 years into the future.
This shift towards more strategic planning has enabled companies to develop a clearer vision of their future and has allowed them to align their resources towards achieving their goals. Additionally, companies are now more proactive in their approach to planning, and they are better equipped to respond to changing market conditions and emerging opportunities. Overall, the new directions in planning have enabled companies to take a more holistic approach to their operations, which has led to increased competitiveness and improved financial performance.
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an asset was sold for $50,000 at the end of its useful life of 7 years. the equipment was bought for $400,000. if it has been depreciated as a 7-year macrs property, the depreciation recapture on this property is $32,160. group of answer choices true false
The statement is false. the appropriate amount of depreciation recapture in this assets is the $98,570, not $32,160.
If the equipment was depreciated as a 7-year MACRS assets, the yearly depreciation price might be 14.29% (as in keeping with the MACRS table for the 7-year property). The collected depreciation over the 7-year useful life would be $251,430 ($400,000 x 14.29% x 7).
The adjusted foundation of the equipment on the time of sale would be $148,570 ($400,000 - $251,430). since the equipment was sold for the amount of $50,000, there would be a depreciation recapture of $98,570 ($148,570 - $50,000).
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Company A has been selling 200 units per month of a product at a price of $12 per unit. The two competitors of Company A have also been selling that product at $12 per unit. The manager of Company A is now considering increasing the price of this product by $2.40. (a) Assume that the category price elasticity in this product category is -0.90. If Company A's two competitors match the $2.40 price increase, what is the price elasticity that Company A should expect? Explain your reasoning. (b) If Company A's two competitors do not match Company A's price increase and maintain their current prices, would the price elasticity that company A should expect be greater or be lower than the one you gave in Part (a)? Give an example of that greater or lower price elasticity. Then, using the tourse material, explain your reasoning. (c) If Company A's two competitors adopted a cooperative stance, what would most likely be their response to Company A's price increase? Describe three pieces of information about Company A's two competitors that would help Company A determine if they would adopt a cooperative stance in this situation. (d) How would you get the information you mentioned in Part (c)? Describe three of the sources of competitive information that were discussed in the course material and explain why each of these sources would be able to provide relevant competitive information
(a) If Company A's competitors match the $2.40 price increase, the price elasticity that Company A should expect is -0.90.
(b) If Company A's competitors do not match the price increase, the price elasticity that Company A should expect would be greater (more negative) than -0.90.
(c) If competitors adopted a cooperative stance, they would most likely match Company A's price increase.
(d) Company A uses Market research,Trade publication ,company financial statement .
a) This is because the category price elasticity of -0.90 assumes that all companies in the category have the same price changes, which is the case here.
b) For example, it could be -1.50. This is because when competitors maintain their prices, customers are more sensitive to price changes from Company A, leading to a greater decrease in demand for each increase in price.
c) To determine if they would cooperate, Company A needs information on: 1) Competitors' pricing strategies and history, 2) Their cost structure and profit margins, and 3) Market share and competitive positioning.
(d) To get this information, Company A could use:
1) Market research reports, which provide insights on competitors' strategies and market positioning;
2) Trade publications, which often discuss industry trends, pricing strategies, and companies' performance; and
3) Company financial statements, which provide information on competitors' cost structures and profit margins.
These sources are reliable for obtaining relevant competitive information.
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Complete question:
Company A has been selling 200 units per month of a product at a price of $12 per unit. The two competitors of Company A have also been selling that product at $12 per unit.
The manager of Company A is now considering increasing the price of this product by $2.40.
(a) Assume that the category price elasticity in this product category is -0.90. If Company A's two competitors match the $2.40 price increase, what is the price elasticity that Company A should expect? Explain your reasoning.
(b) If Company A's two competitors do not match Company A's price increase and maintain their current prices, would the price elasticity that company A should expect be greater or be lower than the one you gave in Part (a)?
Give an example of that greater or lower price elasticity. Then, using the tourse material, explain your reasoning.
(c) If Company A's two competitors adopted a cooperative stance, what would most likely be their response to Company A's price increase?
Describe three pieces of information about Company A's two competitors that would help Company A determine if they would adopt a cooperative stance in this situation.
(d) How would you get the information you mentioned in Part (c)?
Describe three of the sources of competitive information that were discussed in the course material and explain why each of these sources would be able to provide relevant competitive information
Question 12 3 points Save Answer Western Beef stock is valued at $62.10 a share. The company pays a constant annual dividend of $4.40 per share. What is the total retum on this stock? 7.82 percent 07.
The total return on the Western Beef stock, valued at $62.10 per share, is 7.82 percent.
This return is calculated by taking the annual dividend of $4.40 per share and dividing it by the stock value of $62.10. This return is relatively low, but it is a safe and steady return that investors may prefer over higher returns that come with more risk.
The total return on an investment is important to consider when making an investment decision. It is important to consider both the dividend yield and the potential capital appreciation in order to determine the overall return. The total return of 7.82 percent on Western Beef stock is relatively low, but it is a safe and steady return that many investors may prefer.
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An investor has projected three possible scenarios for a project as follows:
Pessimistic—NOI will be $285,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell for $2.14 million after five years.
Most likely—NOI will be level at $285,000 per year for the next five years (level NOI) and the property will sell for $2.85 million.
Optimistic—NOI will be $285,000 the first year and increase 3 percent per year over a five-year holding period.
The property will then sell for $3.90 million. The asking price for the property is $2.85 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario.
Required: a. Compute the IRR for each scenario.
b. Compute the expected IRR.
c. Compute the variance and standard deviation of the IRRs.
The expected IRR for the project is 22.37%, and the variance and standard deviation of the IRRs are 0.8194% and 0.9047%, respectively.
To calculate the expected internal rate of return (IRR) and variance, we need to determine the cash inflows and outflows for each scenario.
Scenario 1: Pessimistic
Cash inflows = $1.50 million (NOI) + $3.90 million (sale price) = $5.40 million
Cash outflows = $2.85 million (purchase price)
IRR = 9.36%
Scenario 2: Most Likely
Cash inflows = $2.25 million (NOI) + $3.90 million (sale price) = $6.15 million
Cash outflows = $2.85 million (purchase price)
IRR = 19.74%
Scenario 3: Optimistic
Cash inflows = $3.00 million (NOI) + $3.90 million (sale price) = $6.90 million
Cash outflows = $2.85 million (purchase price)
IRR = 34.73%
a. To calculate the expected IRR, we multiply each IRR by its probability and sum the results:
Expected IRR = (0.30 x 9.36%) + (0.40 x 19.74%) + (0.30 x 34.73%) = 22.37%
b. To calculate the variance, we first need to calculate the squared deviations from the expected IRR for each scenario:
Deviation for pessimistic scenario = 9.36% - 22.37% = -13.01%
Squared deviation for pessimistic scenario = (-13.01%)^2 = 1.6921%
Deviation for most likely scenario = 19.74% - 22.37% = -2.63%
Squared deviation for most likely scenario = (-2.63%)^2 = 0.0692%
Deviation for optimistic scenario = 34.73% - 22.37% = 12.36%
Squared deviation for optimistic scenario = (12.36%)^2 = 1.5277%
Then, we calculate the weighted average of the squared deviations using the probabilities of each scenario:
Variance = (0.30 x 1.6921%) + (0.40 x 0.0692%) + (0.30 x 1.5277%) = 0.8194%
c. To calculate the standard deviation, we take the square root of the variance:
Standard deviation = √0.8194% = 0.9047%
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Ashley and Doris, two baseball fans, planned a trip to Chicago to watch a March Madness baseball game game. They booked a flight on Southwest from Sacramento to Chicago. On the day of their flight they went to the airport and eventually boarded their plane. Before the plane’s scheduled take off, an announcement was made stating that because of mechanical difficulties, passengers should deplane, go to another gate to board a Delta flight. They were told that the Delta flight would arrive within three minutes of the scheduled arrival of the original Southwest flight. Ashley objected saying, "On the Southwest flight I was going to get little bags of pretzels, on Delta you get a box of raisins. I hate raisins. This is not what I wanted."
Ashley asserts that this is a breach of contract and plans to sue. Will she be successful? (explain legal reasoning)
Doris also objected saying she particularly booked with Southwest because they have the highest COVID-19 standards and vaccination policy in the industry. Doris refused ti fly Delta. Is she right? (explain your legal reasoning)
(note: the above is for example only. If you plan on flying, you can check your airline's policy.)
Ashley may not be able to sue because the plane had technical problems near the end of the flight and they provided a different plane for the trip.
What exactly is a breach of contract?A contract breach happens when one party to a binding agreement fails to deliver on the terms of the agreement. A breach of contract can occur in both written and oral contracts. A contract violation can be handled between the parties involved or in a court of law. A violation of contract is caused by a contracting party's unwillingness or incapacity to meet the contractual duties.
A substantial breach of contract could include failing to produce any product as specified in the agreement or failing to pay the agreed-upon payment for the provided product. A substantial violation would also include the delivery of the incorrect product.
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Example 3: What is the annual interest rate if Put-call parity holds with the following data? – The current stock price is $44. – European call and put option with exercise prices of $40 and time to expiration equal to 2 months – The call and put prices are $5.5 and $1.0, respectively.
The annual interest rate is 7.7%. Put-call parity is a fundamental concept in options trading that relates the prices of call and put options with the current stock price and the exercise price. The present value of the call option $5.5 will be $5.4285. The present value of the put option $1.0 will be $0.9851. and for the exercise price is $40 it will be $39.2143.
It states that the sum of the present values of a call option and a put option with the same exercise price and expiration date is equal to the current stock price plus the present value of the exercise price. Using the given data, we can apply put-call parity to calculate the annual interest rate. Let us assume that the risk-free rate is 2% per annum.
The present value of the call option is calculated as $5.5 / (1 + 0.02 * (2/12)) = $5.4285. The present value of the put option is calculated as $1.0 / (1 + 0.02 * (2/12)) = $0.9851. The present value of the exercise price is $40 / (1 + 0.02 * (2/12)) = $39.2143.
According to put-call parity, the sum of the present values of the call and put options should be equal to the sum of the current stock price and the present value of the exercise price. Therefore, we have:
$5.4285 + $0.9851 = $44 + $39.2143
Simplifying, we get:
$6.4136 = $83.2143
Dividing both sides by $83.2143, we get:
0.077 = 7.7%
Therefore, the annual interest rate is 7.7%.
In conclusion, put-call parity is a useful tool for valuing options and can be used to calculate the implied interest rate. By using the given data and applying the put-call parity formula, we were able to calculate the annual interest rate to be 7.7%.
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Weston Corporation just paid a dividend of $2.5 a share (i.e., D0 = $2.5). The dividend is expected to grow 10% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of the next 5 years? Do not round intermediate calculations. Round your answers to the nearest cent.
D1 = $
D2 = $
D3 = $
D4 = $
D5 = $
To calculate the expected dividend per share for each of the next 5 years, we can use the dividend growth model. According to the problem, the current dividend per share (D0) is $2.5, and it is expected to grow at a rate of 10% for the next 3 years and 5% thereafter.
To calculate D1, we can use the formula D1 = D0 x (1 + g), where g is the expected growth rate. Therefore, D1 = $2.5 x (1 + 0.1) = $2.75.
To calculate D2, we can use the formula D2 = D1 x (1 + g) = $2.75 x (1 + 0.1) = $3.025.
To calculate D3, we can use the formula D3 = D2 x (1 + g) = $3.025 x (1 + 0.1) = $3.32875.
From year 4 onwards, the growth rate will be 5%. Therefore, to calculate D4, we can use the formula D4 = D3 x (1 + g) = $3.32875 x (1 + 0.05) = $3.49519.
To calculate D5, we can use the same formula D5 = D4 x (1 + g) = $3.49519 x (1 + 0.05) = $3.67095.
Therefore, the expected dividend per share for each of the next 5 years is:
D1 = $2.75
D2 = $3.03
D3 = $3.33
D4 = $3.50
D5 = $3.67
In summary, using the dividend growth model, we can calculate the expected dividend per share for each year based on the expected growth rate. As shown in this example, as the growth rate decreases, the dividend per share increases at a lower rate. This information can be useful for investors who are looking to invest in a company for its dividend payments.
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An investor holds 1 ABC Jan 80 Call. ABC splits 2 for 1. On the ex date, the holder will have:
A
1 ABC Jan 40 Call
B
1 ABC Jan 80 Call
C
2 ABC Jan 40 Calls
D
2 ABC Jan 80 Calls
When a company undergoes a stock split, the number of outstanding shares increases while the price per share decreases proportionally. In this scenario, ABC has split 2 for 1, meaning that for every one share an investor holds, they will now have two shares.
In the case of an options contract, such as the 1 ABC Jan 80 Call held by the investor in question, the terms of the contract may be adjusted to reflect the stock split. In this case, the investor will now hold 2 ABC Jan 80 Calls instead of just one.
This adjustment ensures that the investor's rights and obligations under the options contract remain unchanged after the stock split. The investor still has the right to purchase shares of ABC at the strike price of $80 until the expiration date in January, but now has two options contracts instead of one.
Overall, the stock split has not changed the value of the options contract for the investor, but has instead increased their potential for profit or loss. If the price of ABC's stock were to increase significantly, the investor now has two options contracts to exercise at the lower strike price of $80, potentially increasing their profit.
On the other hand, if the price of ABC's stock were to decrease, the investor now has two options contracts that may be worth less than the original single contract.
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If a nation (H) experiences 2% inflation per year and its trading partner (F) experiences 3% inflation per year, and if the purchasing power parity holds, what happens to its nominal exchange rate, E(H/F)? O a. It does not change. O b. It appreciates by 1% per year. O c. It becomes negative. O d. It depreciates by 1% per year.
The nominal exchange rate, E(H/F), represents the number of units of currency F one must exchange to purchase one unit of currency H.
When the purchasing power parity holds, the nominal exchange rate should remain unchanged. This means that despite changes in inflation rates, the nominal exchange rate should remain the same.
In the case of nation H experiencing 2% inflation per year and its trading partner nation F experiencing 3% inflation per year, the nominal exchange rate should not change.
The difference in inflation rates should not affect the exchange rate as the purchasing power parity holds. In other words, deflation or inflation should not affect the exchange rate. Therefore, the nominal exchange rate of E(H/F) remains the same.
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Assume that the Sharpe ratio for the market is 0.93. Stock XYZ has a correlation of 0.61 with the market, and a volatility of 0.44. Assuming CAPM, calculate Stock XYZ's risk premium. 19.97% 22.47% 021.22% 24.96% 23.71%
The answer to this question is none of the options given above. To calculate Stock XYZ's risk premium using the CAPM model, we need to consider the Sharpe ratio, correlation, and volatility provided. Here's a step-by-step explanation:
1. First, we need to find the market risk premium. We can do this by dividing the Sharpe ratio by the volatility of the market:
Market Risk Premium = Sharpe Ratio / Market Volatility
2. Given that the Sharpe ratio for the market is 0.93, and Stock XYZ's correlation with the market is 0.61, we can find the market volatility:
Market Volatility = Sharpe Ratio / Correlation = 0.93 / 0.61 ≈ 1.52
3. Now, we can calculate the market risk premium:
Market Risk Premium = 0.93 / 1.52 ≈ 0.612
4. Next, we need to find the beta of Stock XYZ. Beta is the sensitivity of the stock to market movements, and it can be calculated as:
Beta = Correlation × (Stock Volatility / Market Volatility) = 0.61 × (0.44 / 1.52) ≈ 0.61 × 0.2895 ≈ 0.1766
5. Finally, we can calculate Stock XYZ's risk premium using the CAPM model:
Stock XYZ's Risk Premium = Beta × Market Risk Premium = 0.1766 × 0.612 ≈ 0.108
To express this as a percentage, multiply by 100: 0.108 × 100 = 10.8%
None of the provided options match this result. The calculated Stock XYZ's risk premium is approximately 10.8%.
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what is collaborative engineering? group of answer choices applies technology to the activities in the order life cycle from inquiry to sale allows an organization to reduce the cost and time required during the design process of a product helps organizations reduce their investment in inventory while improving customer satisfaction through product availability enables an organization to react more quickly to resolve supply chain issues
Collaborative engineering is a process that applies technology to the activities in the order life cycle from inquiry to sale.
Definition of collaborative engineeringCollaborative engineering is a process that allows multiple individuals or teams to work together on a project, using technology to improve communication and cooperation.
It applies technology to the activities in the order life cycle from inquiry to sale, and enables an organization to reduce the cost and time required during the design process of a product.
By working collaboratively, organizations can reduce their investment in inventory while improving customer satisfaction through product availability.
Additionally, collaborative engineering enables an organization to react more quickly to resolve supply chain issues by facilitating real-time communication and problem-solving between different departments or stakeholders.
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Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, what is the price of the bond today? Under what condition is it sold?
a. OR $7,276.70, discounted
b. Or $7,276.70, with premium
c. Or $3,279.40, with premium
d. $3,279.40, discounted
e. OR $7,276.70, per pair
Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, period of bond is $3,279.40, and on discounted condition. Correct alternative is d.
Information given in the questions are as follows
Face value = 5000
Coupon rate = 7%
Years to maturity = 10 (since the 15 year bond is issued 5 years ago)
Required return = 12%
Coupon Payment =350
Maturity= 15
Market rate= 12.00%
Number of times compounded= 2
PV(0.12/2,15*2,-350/2,-5000)
= $3,279.40
Since the price of the bond is less than the face value of the bond, the bond is selling at a discount
Answer = $3,279.40, discount
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one strong risk associated with using a pioneering strategy is ______.
Risk is a significant danger of utilizing a pioneering strategy is called Entrepreneurial. Customers might not favor the novel good or service.
Explain the three different types of entrepreneurial entrance strategies—pioneering, imitative, and adaptive—in a few words. refers to coming up with novel solutions to existing issues or finding novel methods to satisfy consumers' expectations. Discovering and acting on opportunities includes two stages of work. a new commercial endeavour, frequently based on previous experience.
Most entrepreneurship startups are funded by angel investors. Entrepreneurs frequently enter an established market that already has rivals rather than developing a new one. Entrepreneurs are as a consequence taking on competitive risk, which is the possibility that their products won't be able to obtain market share due to alternatives.
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One strong risk associated with using a pioneering strategy is the possibility of failure due to lack of precedent and untested market demand.
Pioneering strategies involve introducing new products, services or ideas to the market, which can be a risky move as it requires significant investment and effort to create awareness and acceptance among customers. Without a clear understanding of the market demand and consumer preferences, a pioneering strategy can result in low sales and revenue, and in some cases, lead to the downfall of the business.
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mc6-1 each of the following is an instigation event in the revenue cycle, except. a) sales call b) advertising campaign c) customer inquiry d) shipment
Each of the following is an instigation event in the revenue cycle, except for option D, shipment.
The revenue cycle consists of a series of events that lead to generating revenue for a business. These events include attracting potential customers, making sales, and ultimately receiving payment for the goods or services provided.
Option A, the sales call, is an instigation event because it is the initial contact made by the sales team to potential customers to promote their products or services. This can help generate interest and drive revenue for the business.
Option B, an advertising campaign, is also an instigation event in the revenue cycle. An advertising campaign is a planned series of advertisements designed to reach a specific target audience and achieve marketing objectives. This can create awareness, generate interest, and encourage potential customers to make a purchase, thus contributing to the revenue cycle.
Option C, customer inquiry, is another instigation event. A customer inquiry is when a potential customer shows interest in the company's products or services. This can lead to a sales call or further discussion, which may result in a sale and contribute to the revenue cycle.
Option D, shipment, is not an instigation event in the revenue cycle. Shipment refers to the process of delivering goods to customers after a purchase has been made. While it is a crucial part of the overall customer experience, it is not an event that directly leads to generating revenue. Rather, it is part of the fulfillment process after a sale has been completed.
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you will put your answers into a textbox. be sure to number your answer with the correct question number. you do not have to show your work. a certain country has a money supply of $50. the velocity of money is 10. the quantity of goods being produced is 400. 1. what is the average price of goods in the store for this country (to two places past the decimal point)? now the central bank of this country doubles the money supply (an increase of 100%) to $100. velocity stays the same. the quantity of goods produced rises to 450 goods. 2. what is the new price level (to two places past the decimal point)? 3. what is the inflation rate for this country (to one place past the decimal point)? you answer should be in percent form.
1. The average price of goods in the store for this country is $1.25.
2. The new price level after the central bank doubles the money supply is $2.22.
3. The inflation rate for this country is 77.6%.
1. To calculate the average price of goods, use the equation MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the quantity of goods. In this case, M = $50, V = 10, and Q = 400. So, 50 * 10 = P * 400. Solving for P, we get P = $1.25.
2. After the central bank doubles the money supply, M becomes $100, and the quantity of goods produced rises to 450. So, 100 * 10 = P * 450. Solving for P, we get P = $2.22.
3. To find the inflation rate, use the formula (New Price Level - Old Price Level) / Old Price Level * 100%. In this case, the new price level is $2.22 and the old price level is $1.25. So, the inflation rate is (2.22 - 1.25) / 1.25 * 100% = 77.6%.
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the three prescriptions involved in developing a personal-selling philosophy are to adopt the marketing concept, to assume the role of problem solver or partner in helping customers make informed and intelligent business decisions, and to
The three prescriptions for creating a personal selling philosophy are: adopting the marketing concept; assuming the role of problem solver or partner in aiding clients in making informed and wise business decisions; and valuing personal selling as a service to society and a respectable profession.
The systematic study of broad and fundamental topics, such as those relating to existence, knowledge, reason, values, the mind, and language, is known as philosophy. The remark is attributed to Pythagoras (c. 570–c. 495 BCE), even though several authors contest this claim. Inquiry, critical dialogue, logical reasoning, and methodical presentation are all examples of philosophical approaches.
A philosopher was a practitioner of philosophy, which historically embraced all branches of knowledge. For instance, Isaac Newton's Mathematical Principles of Natural Philosophy, published in 1687, later earned the title "book of physics." Astronomy, medicine, and physics are all part of "natural philosophy," a subject that has its roots in ancient India and Ancient Greece.
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10 . competitive supermarkets a small town is served by many competing supermarkets, which all have the same constant marginal cost. use the black point (plus symbol) to show the competitive price and quantity in this market. then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. competitive market competitive outcome consumer surplus producer surplus price, cost, revenue quantity of groceries demand marginal cost now suppose that the independent supermarkets combine into one chain. use the black point (plus symbol) to show the profit-maximizing monopoly outcome. then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. finally, use the black area (plus symbol) to shade the area representing deadweight loss. monopoly monopoly outcome consumer surplus producer surplus deadweight loss price, cost, revenue quantity of groceries demand marginal cost marginal revenue which of the following statements is true about the changes that occur after the supermarkets merge? check all that apply. consumer surplus falls. total surplus falls. the market price remains unchanged.
In the competitive market scenario, the competitive price and quantity are determined by the intersection of the demand curve and the marginal cost curve.
Step 1: Identify the point where the demand curve intersects the marginal cost curve. This point represents the competitive price and quantity.
Step 2: To find consumer surplus, locate the area above the market price and below the demand curve. Shade this area with the green area (triangle symbol).
Step 3: To find producer surplus, locate the area below the market price and above the marginal cost curve. Shade this area with the purple area (diamond symbol).
Now, let's analyze the monopoly outcome after the supermarkets merge.
Step 4: Identify the intersection point between the marginal cost curve and the marginal revenue curve. This determines the profit-maximizing quantity.
Step 5: Determine the monopoly price by finding the point on the demand curve that corresponds to the profit-maximizing quantity.
Step 6: Shade the new consumer surplus area with the green area (triangle symbol) and the new producer surplus area with the purple area (diamond symbol).
Step 7: Calculate the deadweight loss by finding the area between the demand curve and the marginal cost curve that is not part of the consumer or producer surplus. Shade this area with the black area (plus symbol).
Regarding the changes that occur after the supermarkets merge:
- Consumer surplus falls, as the price increases and the quantity consumed decreases.
- Total surplus falls, as the deadweight loss is introduced due to the monopolistic pricing.
- The market price does not remain unchanged; it increases under the monopoly outcome.
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A(n) ________ methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one.
A. explicit
B. tacit
C. conversion
D. structured
E. parallel
A structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is D. structured.
The work of structured methodology is to provide a frame-work within which the systems development can produce an effective solution to a business problem which requires the use of a computer system and a set of techniques. Structured analysis refers to a method of development in which permission is given to the analyst to understand and know about the system and all of its activities in a logical way. It is a graphic that is used to specify the presentation of the application.
Thus, a structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is option D.
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if an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. true or false
True. If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. This requirement is set by federal regulations to ensure the accuracy and integrity of appraisals used in such transactions.
This requirement is set by the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) under the Uniform Standards of Professional Appraisal Practice (USPAP). The purpose of this requirement is to ensure that appraisals are conducted in a competent and reliable manner and that the interests of both lenders and borrowers are protected. The Appraisal Subcommittee (ASC) is an agency within the Federal Financial Institutions Examination Council (FFIEC) that oversees the appraisal profession in the United States. One of its key responsibilities is to enforce the Uniform Standards of Professional Appraisal Practice (USPAP), which are the generally accepted ethical and performance standards for the appraisal profession in the United States. Under USPAP, all appraisal reports for federally related transactions must be prepared by state-certified or licensed appraisers. A federally related transaction is defined as any real estate-related financial transaction that is regulated by a federal agency or that involves a federally insured or regulated financial institution.
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True. If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser.
This requirement is part of the regulations under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which was enacted in 1989 to improve the safety and soundness of the financial system. The purpose of requiring a state-certified or licensed appraiser is to ensure that the appraisal report is objective, unbiased, and reliable.
If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. This requirement is part of the Appraisal Subcommittee's Uniform Standards of Professional Appraisal Practice (USPAP), which sets forth the minimum standards that must be met by appraisers when appraising property in connection with federally related transactions.
The USPAP requires that appraisals be conducted by appraisers who are certified or licensed in the state in which the property is located, and who have demonstrated a level of competency and knowledge sufficient to perform the appraisal in a professional manner.
By requiring appraisals to be conducted by qualified professionals, the USPAP helps to ensure that appraisals are accurate, unbiased, and reflective of the true value of the property being appraised.
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a firm expects to increase its annual dividend by 20 percent per year for the next two years and by 15 percent per year for the following two years. after that, the company plans to pay a constant annual dividend of $3 a share. the last dividend paid was $1.00 a share. what is the current value of this stock if the required rate of return is 12 percent? group of answer choices $17.71 $20.50 $18.97 $21.08 $21.69
The current value of the stock is $20.50.
To calculate the current value of the stock, we need to use the dividend discount model. We first calculate the dividends for the next four years:
Year 1: $1.00 x 1.20 = $1.20
Year 2: $1.20 x 1.20 = $1.44
Year 3: $1.44 x 1.15 = $1.66
Year 4: $1.66 x 1.15 = $1.91
From year 5 onward, the dividends are expected to be constant at $3 per share. Using the dividend discount model formula, we can calculate the present value of the dividends:
PV = D1/(1+r) + D2/(1+r)^2 + D3/(1+r)^3 + D4/(1+r)^4 + D5/(r-g)
PV = $1.20/(1+0.12) + $1.44/(1+0.12)^2 + $1.66/(1+0.12)^3 + $1.91/(1+0.12)^4 + $3/(0.12-0.15)/(1+0.12)^4
PV = $0.89 + $1.01 + $1.05 + $1.05 + $22.03
PV = $26.03
Finally, we need to discount the present value of the dividends back to the present to get the current value of the stock:
Current value of stock = $26.03/(1+0.12)^4
Current value of stock = $20.50
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the upper paleolithic refers to the time period between ___________ and ___________ years ago.
The upper paleolithic refers to the time period between 50,000 and 10,000 years ago.
The Upper Paleolithic had a cultural explosion on par with the Renaissance. Many of the human traditions that serve as the cornerstone of modern social life initially appeared during the Upper Paleolithic, commonly referred to as the Late Stone Age.
Dates for the Upper Paleolithic range from 50,000 to 10,000 years ago. African, European, and Asian populations of several human types coexisted during this period. They significantly improved instruments and artistic mediums. Materials that were readily available locally were used to create Upper Paleolithic art. Local flora were used to create dyes, and sculptures were carved out of a range of materials.
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true or false? before the creation of the sarbanes-oxley act (sox), auditors and accountants were self-regulating, in which they created and enforced their own rules of conduct.
True. Before the Sarbanes-Oxley Act, auditors and accountants were primarily self-regulated through professional organizations such as the AICPA.
Before the introduction of the Sarbanes-Oxley Act (SOX), the auditing and accounting professions were essentially self-regulated. Professional organisations such as the American Institute of Certified Public Accountants (AICPA) developed and enforced their standards of conduct. This self-regulation includes creating ethical standards, auditing and accounting standards, and implementing penalties for noncompliance.
However, after a succession of high-profile accounting scandals, Congress approved the SOX Act in 2002, which established several measures to tighten the regulation of the accounting profession and restore public faith in financial reporting.
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________ logos can generally be more easily transferred across product categories, cultures and boundaries.
The transferability of a logo is an important factor for companies to consider when designing their brand identity. Logos that are abstract, iconic, or simple tend to be more easily transferred across product categories, cultures, and boundaries, while logos that are too specific or complex may be more difficult to transfer.
Logos are a visual representation of a brand or company that can include images, symbols, or text. The transferability of a logo is an important consideration for companies when designing their brand identity.
Logos that are abstract, iconic, or simple tend to be more easily transferred across product categories, cultures, and boundaries. Abstract logos are often made up of simple shapes and lines, making them easy to recognize and remember. Iconic logos are recognizable images that represent a company, such as Apple's apple or Nike's swoosh. Simple logos are those that use a limited color palette and clean lines, making them easily reproducible across different media.
On the other hand, logos that are too specific or complex may be more difficult to transfer across different product categories or cultures. For example, a logo that includes a specific product or cultural reference may not resonate with consumers in a different region or country. Similarly, a logo with intricate details may be difficult to reproduce on different materials or at different sizes.
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Abstract logos can generally be more easily transferred across product categories, cultures and boundaries.
Abstract logos use geometric shapes, symbols, or other design elements to create a unique and distinctive image that does not represent any particular object or concept. This type of logo can be more versatile and adaptable across different product categories, cultures, and boundaries because it does not rely on any specific imagery or associations that may not translate well in different contexts.
Abstract logos can also be easier to recognize and remember because they tend to be simple, clean, and visually appealing. This can be especially important for companies that operate in multiple countries or regions, as their logos need to be recognizable and memorable to a wide variety of audiences.
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the ________ method of estimating allowance for doubtful accounts is based on the idea that a given percent of a company's credit sales for the period are uncollectible.
The percentage of sales method of estimating allowance for doubtful accounts is based on the idea that a given percent of a company's credit sales for the period are uncollectible.
A forecasting methodology that bases financial projections on sales is the percentage of sales method. Accounts receivable and cost of goods sold are two financial statement elements that are expressed as a proportion of sales. Following that, businesses evaluate their financial future using this data.
The percentage of sales approach connects sales information to a company's revenue and balance sheets. It's among the most effective ways a company may come up with a thorough financial forecast statement.
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The percentage of sales method is used to estimate the allowance for doubtful accounts based on a given percent of a company's credit sales.
The percentage of sales method is a popular approach used by companies to estimate their allowance for doubtful accounts. This method is based on the idea that a certain percentage of a company's credit sales for the period will not be collected. To calculate the allowance for doubtful accounts using this method, a company typically reviews its historical collection patterns and determines an appropriate percentage of credit sales that are likely to be uncollectible. This percentage is then applied to the total credit sales for the period to arrive at an estimated amount of uncollectible accounts. The estimated amount is recorded as an expense on the income statement and as a contra-asset on the balance sheet, which is known as the allowance for doubtful accounts. This method provides a straightforward and simple way to estimate the allowance for doubtful accounts and is widely used by companies of all sizes.
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A Treasury bond that you own at the beginning of the year is worth $1,010. During the year, it pays $30 in interest payments and ends the year valued at $1,020. What was your dollar return and percent return? (Round your percent return answer to 2 decimal places.)
Dollar return $ Percent return %
Return in dollars: $40 (ending value of $1,020 - starting value of $1,010) plus $30 in interest payments. Return percentage: 4.00% ($40 in return divided by $1,010 in the starting value, multiplied by 100, and rounded to two decimal points)
How is the dollar rate of return determined?ROI is determined by deducting the investment's original cost from its end value, dividing the result by the investment's cost, and then multiplying the result by 100. ROI has several applications.
How is the rate of return determined using the beginning and ending balances?The investor will use the following formula to determine the total return rate (which is required to determine the annualised return): 5000 - 2000 or (ending value - beginning value) / (beginning value)
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problem 15-01 given the following information concerning a convertible bond: principal: $1,000 coupon: 5 percent maturity: 17 years call price: $1,050 conversion price: $37 (that is, 27 shares) market price of the common stock: $31 market price of the bond: $1,030 what is the current yield of this bond? round your answer to two decimal places. % what is the value of the bond based on the market price of the common stock? use the given above number of shares into which the bond may be converted. round your answer to the nearest dollar. $ what is the value of the common stock based on the market price of the bond? use the given above number of shares into which the bond may be converted. round your answer to the nearest cent. $ what is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? round your answer to the nearest dollar. $ nonconvertible bonds are selling with a yield to maturity of 7 percent. if this bond lacked the conversion feature, what would the approximate price of the bond be? assume that the bond pays interest annually. use appendix b and appendix d to answer the question. round your answer to the nearest dollar. $ what is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? round your answer to the nearest dollar. $ what is the probability that the corporation will call this bond? since the price of the stock is -select- than the exercise price of the bond, the probability of the bond being called is -select- .
a. The current yield of the bond is 4.85%.
b. The value of the bond based on the market price of the common stock is $1,162.
c. The value of the common stock based on the market price of the bond is $33.
d. The premium in terms of stock that the investor pays when purchasing the convertible bond instead of the stock is $1,030 - $1,162 = $132.
e. If the bond lacked the conversion feature, its approximate price would be $923.
f. The premium in terms of debt that the investor pays when purchasing the convertible bond instead of a nonconvertible bond is $1,030 - $923 = $107.
g. The probability that the corporation will call this bond is unknown since the prompt doesn't give information about the stock price being higher or lower than the call price.
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A company had net sales of $340,500, its cost of goods sold was $257,000, and its net income was $13,750. The company's gross margin ratio equals 24.5%.
True or False?
The statement "A company had net sales of $340,500, its cost of goods sold was $257,000, and its net income was $13,750. The company's gross margin ratio equals 24.5%. is true, because of Gross margin ratio.
we need to calculate the gross margin ratio and compare it to the provided percentage.
Step 1: Calculate the Gross Margin
Gross Margin = Net Sales - Cost of Goods Sold
Gross Margin = $340,500 - $257,000
Gross Margin = $83,500
Step 2: Calculate the Gross Margin Ratio
Gross Margin Ratio = (Gross Margin / Net Sales) x 100
Gross Margin Ratio = ($83,500 / $340,500) x 100
Gross Margin Ratio = 0.245 x 100
Gross Margin Ratio = 24.5%
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You bought a stock one year ago for $49.83 per share and sold it today for $56.83 per share. It paid a $1.37 per share dividend today. What was your realized retum? a The realized rotum was%. (Round t
The realized return on the stock investment is 18.08%.
To calculate the realized return, we need to consider both the capital gain (or loss) and the dividend income. The capital gain is the difference between the selling price and the purchase price, which is $7.00 per share ($56.83 - $49.83). The dividend income is $1.37 per share. Therefore, the total return per share is $8.37 ($7.00 + $1.37).
To calculate the realized return as a percentage, we need to divide the total return by the initial investment and multiply by 100. The initial investment is the purchase price per share, which is $49.83. Therefore, the realized return is 16.78% ($8.37 / $49.83 x 100), rounded to two decimal places.
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The liquidity of secondary markets is NOT demonstrated by:
the daily turnover
the sale of securities by issuers at an acceptable price
the size of the bid-ask spread
the degree
The statement that "the liquidity of secondary markets is NOT demonstrated by the degree" is incomplete and therefore difficult to interpret
The liquidity of secondary markets is typically demonstrated by the daily turnover, which refers to the total value of securities that are bought and sold on a given day.
A high daily turnover indicates that there is a large amount of trading activity in the market, which suggests that buyers and sellers are able to easily find counterparties to transact with.
The sale of securities by issuers at an acceptable price is not necessarily a demonstration of the liquidity of secondary markets, as this activity is more related to the primary market.
The primary market is where new securities are issued and sold to investors for the first time, whereas the secondary market is where existing securities are bought and sold among investors.
The size of the bid-ask spread is also often used as an indicator of the liquidity of secondary markets. The bid-ask spread refers to the difference between the highest price that a buyer is willing to pay for a security (the bid price) and the lowest price that a seller is willing to accept (the ask price).
A narrow bid-ask spread suggests that there is a high level of liquidity in the market, as buyers and sellers are willing to transact at similar prices.
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