The APT results in a 19.80% equilibrium rate of return for this stock.
The following formula would need to be applied in order to determine the equilibrium rate of return using the APT given the facts stated in the question:
E(rj) = rf + bj1RP1, bj2, bj3, bj4,... + bjnRPn
As a result, the equilibrium rate of return is equal to 8% plus 0.7*8% plus 0.4*5% plus 0.6*7%.
= 19.80%
Using the APT, the equilibrium rate of return on this stock is 19.80%.
What is the expected rate of return on a stock with a beta of one if the market's expected return is 15%?
Beta x market expected return = 15%
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Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. When is Broker John required to make an escrow deposit
Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. Broker John is required to make an escrow deposit on Tuesday.
What is the deposit?A deposit is the act of placing cash (or cash equivalent) with some entity, most commonly with a financial institution, such as a bank.The deposit is a credit for the party (individual or organization) who placed it, and it may be taken back (withdrawn) by the terms agreed at the time of deposit, transferred to some other party, or used for a purchase at a later date.Deposits are usually the main source of funding for banks.What is money?Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfils these functions can be considered as money.Learn more about deposit here:
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How impactful was late shipments on customer questions?
There is some impact on customer questions due to delay in shipments.
As can be seen from the data that percentage shipped on time has been falling month on month (though) at a declining rate. This definitely would have caused some concerns in the minds of consumers leading to higher customer questions. However the customer questions have been rising month on moth (increasing trend) while shipments have been delayed at declining rate, which points to the fact that there are other reasons too for rising customer questions.
According to the study, 69% of consumers "are least interested in shopping with such a retailer in the future" due to shipping errors on customer questions.
For instances like when a purchased item is not delivered two days after the promised date.
Transporting Mistake
It alludes to any kind of mix-ups which are in the shipment details, that incorporate, distribution center mistake with practically no impediment,, picking blunder, , overage, naming blunder, any Item lack, harm ,requesting blunder.
Chargebacks are one of the many consequences of shipping errors. Other consequences includeclients ends up being MiserableBombed conveyances equivalent additional fuel and driver finance.Returns on products equal additional operating expenses.Concerns from customers about the productCustomers have negative perceptions of the business.since when they shop online, customers always expect perfection. Throughout this process, the business frequently fails to satisfy customers.To know more about shipments visit
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what features does each financial institutions have
Lucky Laundry reported assets of $950 and equity of $580. What is Lucky's debt ratio?
Answer:
0.3894
Explanation:
Debt Ratio = Total Debts/Total Assets
We will find the amount of Debt since amount of total assets is given
Assets = Liabilities + Equity
$950 = L + $580
L = $950 - $580
L = $370
Now lets find the Debt ratio
Debt Ratio = Total Debts/Total Assets
= $370/$950
= 0.3894
science week1 qarter4 grade 8
Answer:
Explanation:
444
Explain two ways in which mohammad could increase added value
The 2 ways in which where Mohammed could increase the added value of his company includes:
He could introduce new products and could modernize appearance and equipment in his coffee shop.He could start making cakes and pastries for special occasions like birthdays and weddings.What is an Added value?It refers to the profit that stays in the company as a difference between the total amount earned from sales and the total amount spent for production.
If such company's expenses for each product or service are higher then its price, then it is not going to have any added value. For instance, when company sells postcards for 5 dollars. In the same time, costs for making one postcard are 3 dollar. Added value = = 5 dollar - 3 dollar = 2 dollar.
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in the u.s., manufacturing centers are generally clustered mostly in the
In the U.S., manufacturing centers are generally clustered mostly in the Midwest and Northeast regions. These regions have historically been home to major industrial cities such as Detroit, Cleveland, Pittsburgh, and Chicago. The abundance of natural resources, including iron ore and coal, made the Midwest a prime location for manufacturing in the early 20th century.
The Northeast region, on the other hand, was home to textile mills and other manufacturing industries during the Industrial Revolution. While manufacturing has shifted and diversified over time, these regions still remain major players in the industry, with states like Michigan, Ohio, and Pennsylvania being among the top manufacturing states in the country. However, there has been a trend in recent years of manufacturing moving to Southern states, as they offer lower labor costs and more business-friendly environments.
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On Dec. 1, 2014, Ramil Sarabia opened a videotape rental store, Kalibo Video, by investing P250,000 cash from his personal savings account. During the month of December, the following transactions took place. Dec. 1 + 5 8 11 16 17 23 24 30 Acquired supplies on account, P67,000. Acquired videotape costing P235,000, on account. Paid P85,000 to creditors. Received P78,000 cash from ACA Video for rental fees. Billed video city for video rentals, P105,000 Paid salaries, P65,000 Collected P77,000 from video city Sarabia withdrew P47,000 from the business. Paid rent for the month, P41,500. Paid utilities bill for the month, P17,500 Required: Record the transactions for the month of December 2014 using a financial transaction worksheet. Use the following accounts: Cash; Accounts Receivable; Supplies; Videotape; Accounts Payable; and Sarabia, Capital
At the end of the month, the balance in the Cash account should be P272,000 (P250,000 + P78,000 - P85,000 + P77,000 - P47,000 - P41,500 - P17,500), while the balance in the Sarabia, Capital account should be P205,000 (P250,000 - P47,000). The balances in the other accounts should reflect the corresponding changes during the month.
The financial transaction worksheet for Kalibo Video for the month of December 2014:
Date Accounts Debit Credit
1-Dec Cash 250,000.00
1-Dec Supplies 67,000.00 Accounts Payable
5-Dec Videotape 235,000.00 Accounts Payable
8-Dec Accounts Payable 85,000.00 Cash
11-Dec Accounts Receivable 78,000.00 Cash
16-Dec Accounts Receivable 105,000.00
17-Dec Salaries Expense 65,000.00 Cash
23-Dec Cash 77,000.00 Accounts Receivable
24-Dec Sarabia, Capital 47,000.00 Cash
30-Dec Rent Expense 41,500.00 Cash
30-Dec Utilities Expense 17,500.00 Cash
The business:
Started with P250,000 in cash from Sarabia's personal savings account on December 1
Acquired supplies worth P67,000 on account on December 1
Acquired videotapes costing P235,000 on account on December 5
Paid P85,000 to creditors on December 8
Received P78,000 in cash from ACA Video for rental fees on December 11
Billed Video City P105,000 for video rentals on December 16
Paid salaries amounting to P65,000 in cash on December 17
Collected P77,000 in cash from Video City on December 23
Sarabia withdrew P47,000 in cash from the business on December 24
Paid rent expense amounting to P41,500 and utilities expense amounting to P17,500 in cash on December 30
At the end of the month, the balance in the Cash account should be P272,000 (P250,000 + P78,000 - P85,000 + P77,000 - P47,000 - P41,500 - P17,500), while the balance in the Sarabia, Capital account should be P205,000 (P250,000 - P47,000). The balances in the other accounts should reflect the corresponding changes during the month.
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Tejas has decided to finance his college education through student loans. He is planning on taking out $100,000 in loans to become a nursery school teacher. On average, would this be something a finance professional would recommend?
A. No, because he is taking out more debt then he will ever be able to pay back.
B. Yes, because you should always finance your education.
C. Yes, because he is using the money to advance his career.
D. No, because you should never take out student loans.
Answer: A. No, because he is taking out more debt then he will ever be able to pay back.
Explanation:
Getting the finance to foot one's bills could come from many different sources, one of which is to put in for a loan. However, the advice to secure a loan might best be given by a finance expert who has the knowledge and expertise required to adequately access the value of the loan, the probable return on investment and ayher embedded considerations. In the scenario given above, taking out a loan of up to $100,000 in other to target the job of finally landing a teaching job at a nursery school which would on average return a meagre pay than cannot be pitted with the loan value would be considered unreasonable on average by a finance professional simply because the return on investment will probably be nothing near the value of the loan. This way, the debt incurred from due to the loan application may never be returned from the intended job.
two rivers that helped China develop
primero el rio Amarillo (Huang He) en el norte, y más tarde el Yangtze en el sur.
In the delaware statewide residential purchase contract, where would you state that the buyer will take title to the property?
In the Delaware statewide residential purchase contract, we would state that the buyer will take title to the property in the conveyance section.
A Delaware residential purchase and sale agreement is a property sale contract.
A deal is struck between the seller of the property and the potential buyer, and the terms and conditions of that deal are spelled out in the contract.
The buyer and seller will sign the agreement once both parties are satisfied with the terms, which include the purchase price, financing options, closing details, and property condition.
Before the parties are bound by the agreement, the seller must complete and provide to the potential buyer a state-mandated disclosure form.
The sellers acknowledge in the Conveyance section of this contract that the property will be conveyed in one of several ways, including fee simple, co-op ownership, or a leasehold subject to ground rent.
Hence, convenyance is the correct section.
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An extremely rainy spring and summer may impact growing crops. This is an example of what type of risk
Answer:
Environmental risk
Explanation:
In simple words, The environmental risk of farming refers to the affect that various agricultural activities have on the environments in which they operate, as well as how those impacts can be linked to those practices. Agriculture's ecological influence varies greatly depending on the activities used by growers as well as the size at which they operate.
1 $ 43.49 - 2 48.47 $ .78 3 57.39 .81 4 45.47 .90 5 52.39 .95 6 61.47 1.03 what are the arithmetic and geometric average returns for the stock? (
The arithmetic average return for the stock is $51.85, and the geometric average return is $1.03.
To calculate the arithmetic average return, we add up all the returns and divide by the number of observations. In this case, the returns are 43.49, 48.47, 57.39, 45.47, 52.39, and 61.47. Adding them up gives us a total of 308.68. Dividing by 6 (the number of observations) gives us an arithmetic average return of $51.85.
To calculate the geometric average return, we multiply all the returns together and then take the nth root, where n is the number of observations. In this case, the returns are 0.78, 0.81, 0.90, 0.95, 1.03. Multiplying them together gives us a total of 0.5267415. Taking the 5th root (since there are 5 observations) gives us a geometric average return of $1.03.
The ratio of the sum of all observations to the total number of observations is known as the Arithmetic Mean (AM), or average, in statistics. Outside of statistics, the arithmetic mean can also serve as a model or guide. From an actual perspective, the number juggling mean can be considered a focal point of gravity.
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(1) State which marketing environment affected Xerox's operation. (1mks)
(b) From your answer above, discuss which specific area from that particular enviroment affected how Xerox conducted business. (5mks)
Answer a:
Clearly, Xerox had one major issue concerning its marketing environment.
Due to technological changes, i's primary market was shifting and changing. Xerox didn't see it. Perhaps they did and decided it (the changes that is) not
Explanation:
One keyword or practice or culture or capability that was missing in Xerox was adaptability. Had they envisaged the future and created some internal structure to gradually cater to the changing requirements of their client base, they'd probably still be in business today.
So in a way, it wasn't really the change in the market that affected Xerox. It was Xerox' inability to respond to such changes that did it in. At some point, it became apparent to investors that Xerox was incapable to move with the next tide. They withdrew their funds, sold their shares and the rest is history.
Answer b:
The major area that affected how Xerox conducted business is the technology enviriomment.
Explanation
Due to the availability of technology which made it possible, peoples mindset were beginning to shift from keeping hard copies and or duplicating them to keeping electronic copies.
Two things made this idea very attractive:
1. It reduced cost greatly. In every era, cost reduction has always been an attractive business proposition for companies in any sector or subsector. As firms discovered they could cut down by keeping electronic copies of their documents, the idea quickly caught on. And so did the profits made by the renowned copier decline.
2. Another factor strenghtened the decline in making and keeping hard copies of documents is the ideology that the more papers we made, the more we were damaging our environment.
Companies that quickly adjusted even used their paper reduction efforts as a unique selling marketing proposition.
Cheers
an employee can be dismissed if their job surplus to requirements' outline why this state ment is false
Would Bakugou consider dating Todoroki i mean like its a hella cute ship sooo lemmme know what yall think
Answer:
bakugou and deku is better than.... that
Explanation:
its called the power of smartness
To prevent commingling and accidentally using the funds from one income property to pay for the expenses of another, a broker should ______.
To prevent commingling and accidentally using the funds from one income property to pay for the expenses of another, a broker should Establish a separate escrow account for each property.
The California Real Estate Law (also known as the License Law) is contained in Sections 10000 through 10580 of the Business and Professions Code. The purpose of the law is to regulate the real estate profession and protect the public from incompetent, unethical, or dishonest realtors.
Most homebuyers are interested in being part of the community. Everyone's definition of remote is different, so it's not specific. Burglars may see this as an opportunity to break into your home unnoticed.
The practice of commingling funds occurs when a transaction sponsor/investment manager pools an investor's funds into one account. In commercial real estate investing, fund mergers are perfectly acceptable provided the practice is disclosed to investors and their consent is obtained.
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What are two main components of critical thinkingIn this assignment, you will create two budgets and answer questions about how your budgets have successfully met a long-term goal.
Directions
1. Gather materials and necessary information.
a) Ask your teacher which word-processing software you will be using.
b) Keep your lesson and assignment open in case you need to review what you have learned.
2. Read and follow each set of instructions carefully.
a) To create the budgets, type an amount of money into each cell of the tables you have been given. Be sure to ask your teacher for help if you are not sure how to do this.
b) Make sure you complete the questions on each page
The two main components of critical thinking are: Analysis: Analysis involves breaking down information or a problem into its individual parts, examining the relationships between those parts, and evaluating the evidence and assumptions involved.
It requires the ability to identify relevant information, recognize patterns and connections, and assess the strengths and weaknesses of arguments or ideas. In critical thinking, analysis helps in understanding complex situations, identifying underlying causes or factors, and making informed judgments or decisions based on logical reasoning.
Evaluation: Evaluation involves assessing the credibility, accuracy, relevance, and reliability of information or arguments. It requires questioning and examining the evidence, sources, and assumptions to determine their validity and quality. Evaluating information helps in distinguishing between fact and opinion, identifying biases or fallacies, and making informed judgments or decisions based on well-supported evidence. It also involves considering different perspectives, weighing the pros and cons, and determining the overall merit or value of an argument or solution.
These two components of critical thinking work together to enhance problem-solving skills, promote logical reasoning, and enable individuals to make informed and thoughtful decisions based on sound analysis and evaluation of information.
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National Family Opinion (NFO) contacts several hundred members of its consumer panel and provides them with a printed description of a new chewing gum and its package. Consumers are then given a survey containing several multiple-choice questions about their attitudes toward the new product, based on what they read in the description. The final survey question asks consumers to indicate the likelihood that they would purchase the product. NFO seems to be conducting a: a. Market test b. Concept test c. Prototype test d. Sensitivity test e. Attitude test
Answer: concept test
Explanation:
Based on the information given, we can infer that National Family Opinion (NFO) is conducting a concept test.
Concept testing is the process whereby surveys are used in the evaluation of the acceptance of a new product by the consumers before the product is introduced to the market.
Since the consumers are given a survey which contains different multiple-choice questions about their attitudes toward the new product,
Therefore, the correct option is B.
Omar is having trouble paying his rent and making minimum payments on his student loan and credit cards. What should Omar consider doing to improve his situation?
Answer:
Omar should get budgeting advice from a consumer credit counselor
Explanation:
It is apparent from the question that Omar is having a financial problems as he is finding it difficult to meet up with his student loan and credit cards repayment plan.
It is advisable at this point that he should engage the service of a consumer credit counselor for budgeting advice to improve on his situation.
Consumer credit counselling service is a form of service that help to proffer solution to financial problems through financial education , budgeting assistance and debt management.
Answer:
Omar should get budgeting advice from a consumer credit counselor
Explanation:
Members of the third state were dissatisfied with their way of life under the old regime because:
Members of the third estate were dissatisfied with their way of life under the Old Regime because they experienced social, political, and economic inequalities.
Socially, the Third Estate, which consisted of the bourgeoisie, urban workers, and peasants, made up approximately 98% of the population but were not recognized by the nobility and clergy, who belonged to the First and Second Estates.Politically, the Third Estate was marginalized in the decision-making process. The Estates-General, the representative body, gave each estate a single vote. This structure allowed the First and Second Estates to outvote the Third Estate, despite the significant disparity in population size.
Consequently, the Third Estate's concerns and needs were rarely addressed in policies.Economically, the Third Estate faced a disproportionate tax burden. The First and Second Estates enjoyed tax exemptions, which shifted the financial responsibility onto the Third Estate. This unfair system meant that the bourgeoisie, urban workers, and peasants had to pay the majority of taxes, even though they had the least amount of wealth and resources.
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Today’s savings accounts do not offer interest rates much higher than 1%. How does this impact the power of compounding?
You are the listing agent for the home of your college friend. You will also be finding this friend a new home (as buyer's agent). Your friend has owned his present home for over 20 years and anticipates selling his home for three times the original price paid for it. He expresses concern that after paying the tax on this gain he will not have enough money to make the down payment on a new home.
Provide your friend the best advice you can, including the following:
Describe and explain 1031 exchange rules and if they will help him defer his gain on the sale of his personal residence.
If the new home is purchased for a larger amount than the amount for which the old home was sold, will all the gain be deferred
Explain the various types of loans and how the interest is calculated.
1. 1031 Exchange: A 1031 exchange, also known as a like-kind exchange, allows for the deferral of capital gains taxes on the sale of investment or business properties. However, it does not apply to personal residences. The 1031 exchange rules specifically exclude personal residences, so it cannot be used to defer the gain on the sale of your friend's home.
2. Gain Deferral: If your friend sells his current home for three times the original price, the gain on the sale will be the difference between the selling price and the original price. It's important to note that personal residences have certain tax exclusions available. For example, in the United States, there is a primary residence capital gains exclusion of up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly. If the gain on the sale of your friend's home is within these limits, he may not have to pay any taxes on it.
3. Down Payment Funds: If your friend anticipates not having enough money from the sale of his home to make the down payment on a new home, there are a few options he can consider:
a. Financing: He can explore mortgage options that require a lower down payment, such as FHA loans or other low down payment programs. This can help him secure a new home with a smaller upfront cash requirement.
b. Home Equity: If your friend has built up substantial equity in his current home, he may be able to access it through a home equity loan or line of credit. This would allow him to use the equity as a down payment for the new home while keeping the tax advantages of his current home.
c. Savings and Budgeting: Your friend can also review his overall financial situation, assess his savings, and explore ways to budget and save more aggressively to accumulate the necessary down payment funds.
4. Types of Loans and Interest Calculation: There are various types of loans available for home purchases, including conventional loans, FHA loans, VA loans, and more. The interest on these loans is calculated based on the loan amount, interest rate, and loan term. The specific details of interest calculation can vary depending on the loan type and the lender's policies. It's advisable for your friend to consult with mortgage lenders or a financial advisor to explore the different loan options, understand the interest rates, and determine the most suitable choice for his financial situation.
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EXAMPLE 1: invests $500 at a simple
interest rate of 6%. How much interest will he earn in
one month? In six months? In one year?
planners,checklists ,large calanders,and computer acclipications are used with which time managment skill
Planners, checklists, large calendars, and computer applications are commonly used with the time management skill of "Organization and Planning."
Organization and Planning involves setting goals, prioritizing tasks, and creating a structured approach to manage time effectively. The tools mentioned, such as planners, checklists, large calendars, and computer applications, help individuals in organizing and planning their tasks and schedules.
Planners: Planners are physical or digital tools that allow individuals to jot down their appointments, deadlines, and to-do lists. They provide a visual representation of the tasks and events, enabling better organization and planning.
Checklists: Checklists are helpful in breaking down larger tasks into smaller, actionable steps. They ensure that important tasks are not overlooked and provide a sense of accomplishment as items are checked off the list.
Large Calendars: Large calendars, whether physical or digital, provide a broader view of time, allowing individuals to see their schedule over days, weeks, or months. They aid in visualizing deadlines, important events, and the allocation of time for various activities.
Computer Applications: Various computer applications, such as task management software, project management tools, or calendar apps, offer features for organizing and planning activities. These applications often provide reminders, scheduling options, and collaboration features to enhance time management and productivity. By utilizing these tools and techniques, individuals can enhance their organization and planning skills, leading to better time management, increased productivity, and improved overall efficiency.
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pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15 % 32 % Bond fund (B) 9 % 23 % The correlation between the fund returns is 0.15. Suppose now that your portfolio must yield an expected return of 12% and be efficient, that is, on the best feasible CAL. a. What is the standard deviation of your portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
The standard deviation of the portfolio is 7.09%.
What is the proportion of stock in minimum risky portfolio?= [(0.23)² - (0.32*0.23*0.15)] / [(0.32)² + (0.23)² - (2*0.32*0.23*0.15)]
= 0.31421708452
= 31.42%
What is proportion of bond fund in minimum risky portfolio?= 1 - 0.31421708452
= 0.68578291548
= 68.58%
What is the expected return of minimum risky portfolio?= 0.3142*15% + 0.6858*9%
= 0.04713 + 0.061722
= 0.108852
What is the standard deviation of your portfolio?= ((0.6858)² * (0.23)² * (0.3142)² * (0.33)²) + ((2 * 0.6858 * 0.3142 * 0.32 * 0.23 * 0.15))^0.5
= (0.00026747972 + 0.00475776218)^0.5
= 0.0050252419^0.5
= 0.0708889406
= 7.09%
Therefore, the standard deviation of the portfolio is 7.09%.
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Discuss problems associated with trade deficit
Answer:
A trade deficit creates downward pressure on a country's currency under a floating exchange rate regime. With a cheaper domestic currency, imports become more expensive in the country with the trade deficit. Consumers react by reducing their consumption of imports and shifting toward domestically produced alternatives.
8. Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are 12% and 16%, respectively. The beta of A is 0.7, while that of Bis 1.4. The T-bill rate is currently 5%, whereas the expected rate of return of the S&P 500 index is 13%. The standard deviation of portfolio A is 12% annually, that of B is 31%, and that of the S&P 500 index is 18%. (LO 18-2)
a. If you currently hold a market-index portfolio, would you choose to add either of these portfolios to your holdings? Explain.
b. If instead you could invest only in T-bills and one of these portfolios, which would you choose?
a. If you currently hold a market index portfolio, you should choose to add portfolio B to your holdings rather than portfolio A because the expected rate of return on portfolio B is 16%, which is higher than the expected rate of return on portfolio A, which is 12%.
Since beta measures a portfolio's systematic risk or volatility compared to the market portfolio, a higher beta indicates higher systematic risk or volatility. Since Portfolio B has a higher beta (1.4) than Portfolio A (0.7), this is consistent with Portfolio B being more volatile than Portfolio A.
However, portfolio B's higher expected return of 16% may be adequate to compensate for this additional risk. As a result, portfolio B provides a higher rate of return with a higher degree of risk.
b. If you can only invest in T-bills and one of these portfolios, you should choose portfolio A because it has a lower standard deviation of 12% compared to portfolio B's 31%, which makes it less volatile and more stable.
The expected rate of return on portfolio A is 12%, which is greater than the T-bill rate of 5%. As a result, portfolio A has a higher expected return, but it also has lower risk and volatility, making it a safer and more stable choice than Portfolio B.
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which of the following statements is false? a. allowance for doubtful accounts is a contra account that is used to reduce accounts receivable to its net realizable value. b. because the allowance method results in better matching, accounting standards require its use rather than the direct write-off method, unless bad debts are immaterial. c. the reason the allowance method of recognizing bad debts is used is primarily because it recognizes higher amount of accounts receivable on the balance sheet than the direct method. d. an aging schedule typically categorizes the various accounts by the length of time each invoice is outstanding. e. bad debts expense is debited and allowance for doubtful accounts is credited at the end of the period to recognize bad debts under the allowance method.
The allowance approach is primarily used to produce a more precise estimate of the bad debt expense and to better match revenue and expenses, hence option (C) is erroneous.
Which of the subsequent claims on the tolerance for uncertain accounts is true?The right answer is (a) The usual balance is a credit, while an allowance for doubtful accounts is a contra asset account. Based on information from the previous year and projections for the future, the management transfers a certain amount to the allowance for doubtful accounts each year.
Is the account to which the allowance for doubtful accounts' balance is added a counter asset account?A debit balance typically represents accounts receivable. Its allowance for doubtful accounts counter asset account will have a credit balance. When you include.
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A small business takes out a bank loan of £7,000. The loan will be repaid over 5 years, with a monthly repayment of £125. The total interest the business will pay for this loan as a percentage of the total amount borrowed is:
The total interest the small business will pay for a £7,000 bank loan over 5 years is approximately 7.14% of the total amount borrowed.
To calculate the total interest paid as a percentage of the total amount borrowed, we first need to determine the total repayment amount over the loan period.
Since the monthly repayment is £125 and the loan is for 5 years (60 months), the total repayment would be £125 multiplied by 60, which equals £7,500.
The interest paid can be obtained by subtracting the original loan amount (£7,000) from the total repayment amount (£7,500), resulting in £500. To calculate the percentage, we divide the interest paid (£500) by the total amount borrowed (£7,000) and multiply by 100.
Therefore, the small business will pay approximately 7.14% (£500/£7,000 * 100) of the total amount borrowed as interest over the loan period.
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