If stock prices follow a random walk, then stock investors can make large profits by: A. buying stocks whose prices have been falling for several days.
What happens if share prices follow a random walk?Random walk theory suggests that changes in asset prices are random. This means that stock prices move unpredictably, so that past prices cannot be used to accurately predict future prices. Random walk theory also implies that the stock market is efficient and reflects all available information.
What does it mean when some people claim that stocks follow a random walk?The random-walk theory asserts that there is no pattern to stock-price changes. In particular, past stock-price changes do not enable one to predict future price changes.
To know more about stock prices visit:-
https://brainly.com/question/27062531
#SPJ1
When consumers have more _____ to adjust, demand becomes relativity more elastic.
When consumers have more time to adjust, demand becomes relatively more elastic.
Elasticity is a measure of how sensitive the quantity demanded of a good is to a change in its price or other factors, such as income or availability of substitutes. When demand is more elastic, it means that consumers are more responsive to changes in the product's price or other conditions.
Having more time to adjust allows consumers to explore alternatives, make better-informed decisions, and change their consumption habits if needed. This can happen, for example, when there is a price increase. Consumers with more time to react might decide to switch to a different product, find a substitute, or reduce their consumption. This makes the quantity demanded of the good more sensitive to price changes, resulting in higher price elasticity of demand.
On the other hand, when consumers have less time to adjust, they may continue consuming the same product at a higher price, even if they would have preferred to switch to an alternative in the long run. This makes demand less elastic, as the quantity demanded does not change much in response to price variations.
In summary, the more time consumers have to adapt to changes in the market, the more elastic the demand becomes, as they can respond better to price fluctuations and other factors affecting their purchasing decisions.
Learn more about Elasticity here: https://brainly.com/question/29615048
#SPJ11
sends an exception object out of the current code block or method so it can be handled elsewhere
"Throwing" an exception allows it to exit the current code block or method and be handled by another part of the program.
An exception object is formed when a mistake or unanticipated circumstance happens while the programme is running. The programme can "throw" this object away to allow the exception to be handled by another area of the program, such as a higher-level function or a global exception handler, without having to continue running the present code block or procedure.
This enables more reliable error handling and lessens the chance of crashes or unforeseen behaviour. The exception that was raised includes details regarding the mistake, such as a message outlining the issue or a stack trace indicating where the mistake happened.
Learn more about the exception:
https://brainly.com/question/30467061
#SPJ4
.True or False? There are three criteria that must be met in order for a share purchase plan to be considered noncompensatory. If all three criteria are not met then the plan is considered compensatory.
The given statement "There are three criteria that must be met in order for a share purchase plan to be considered noncompensatory. If all three criteria are not met then the plan is considered compensatory" is true. In order for a share purchase plan to be considered noncompensatory, three criteria must be met.
These three criteria are known as the "safe harbor" rules and they are established by the Financial Accounting Standards Board (FASB) in Accounting Standards Codification (ASC) 718-10-55-37.
The first criterion is that the plan must be available to all employees on an equal basis. This means that the plan cannot favor certain employees over others based on their position, job duties, or any other factors. If some employees are excluded from the plan, then it is considered compensatory.
The second criterion is that the discount on the stock purchase price must be small. Specifically, the discount cannot exceed 5% of the fair market value of the stock at the time of purchase. If the discount is larger than 5%, then the plan is considered compensatory.
The third and final criterion is that the plan cannot contain any features that allow participants to defer income recognition. In other words, participants must recognize the income from the stock purchase in the year that they purchase the shares. If the plan allows participants to defer recognition of the income, then it is considered compensatory.
for more such questions on purchase
https://brainly.com/question/15011480
#SPJ11
during which phase of the engagement does the internal auditor identify the objectives and related controls of the activity being examined?
The phase of an internal audit engagement during which the internal auditor identifies the objectives and related controls of the activity being examined is the planning phase.
During the planning phase, the internal auditor develops an understanding of the activity being examined and assesses the risks associated with that activity. This information is then used to plan the audit, including the audit objectives, scope, and approach, and to develop the audit program. The planning phase is a critical component of the audit process, as it sets the foundation for the entire engagement and helps ensure that the audit is focused, efficient, and effective.
You can learn more about internal auditor at
https://brainly.com/question/28346286
#SPJ11
Sony previously selected Sir Howard Stringer as CEO. Sir Howard was not Japanese and he was nota Sony employee before his selecEon. Which of the following statements is FALSE?(A) Sony's top management team will be more heterogeneous with the addi/on of Sir Howard.(B) Sir Howard will have a broader perspec/ve of the firm and its compe//ve environment than would aSony insider.(C) If Sony's top management team is homogeneous, Sir Howard's future impact on Sony's strategy isambiguous.(D) The decision-making process on Sony's top management team will be smoother and faster with theaddi/on of Sir Howard
It is not true that if Sony's top management team is homogeneous, Sir Howard's future impact on Sony's strategy is ambiguous. Homogeneity in a team refers to the degree to which the members of a group are similar to each other The correct answer is option (C).
in terms of their backgrounds, experiences, and perspectives. When a team is homogeneous, it means that all the members of the team share similar backgrounds, experiences, and perspectives. In such a case, the team may lack diversity of thought and may not be able to bring different perspectives to the table.
In contrast, Sir Howard's appointment as the CEO of Sony brings in a lot of diversity to the top management team. As he is not Japanese and was not a Sony employee before his selection, he has a broader perspective of the firm and its competitive environment than would a Sony insider.
This means that Sir Howard's future impact on Sony's strategy is not ambiguous, but rather, it is expected to be positive. By bringing in a fresh perspective and diverse experiences, Sir Howard can help Sony to think outside the box and come up with innovative ideas that may not have been possible with a homogeneous team.
Furthermore, the decision-making process on Sony's top management team is likely to be smoother and faster with the addition of Sir Howard. This is because Sir Howard has a wealth of experience and knowledge in the field of media and entertainment. He can leverage his expertise to make informed decisions that benefit Sony as a whole. Correct answer is option C
Know more about decision-making here:
https://brainly.com/question/31422716
#SPJ11
If managed efficiently, Food-Polar will have a possible market value of $100 million, $300 million, or $500 million next year, with each outcome being equally likely. What is the expected market value of Food-Polar? a. $260 million b. $300 million c. $280 million
The expected market value of Food-Polar is $300 million, as it is the average of the three possible market values b) $300 million).
To find the expected market value, we need to multiply each possible outcome by its probability and then sum the results. Since each outcome is equally likely, the probability of each is 1/3. Therefore, the expected market value is:
(1/3) x $100 million + (1/3) x $300 million + (1/3) x $500 million = $900 million / 3 = $300 million
This means that if we were to run this scenario many times, we would expect the average market value to be $300 million.
For more questions like Probability click the link below:
https://brainly.com/question/30034780
#SPJ11
given the financial data for three alternatives, find: a b c initial cost $600 $1,200 $400 euab 82 196 70 life 10 years ror 6.1% 10.1% 11.7% the most attractive alternative for a marr of 8% is alt. c. group of answer choices true false
Since option C has the highest ROR (Rate of Return) of 11.7%, which is greater than the MARR of 8%, it is considered the most attractive alternative. Therefore, the answer is true.
The best way to compare the three alternatives is by calculating their present worths at a MARR (Minimum Acceptable Rate of Return) of 8%.
Using the formula for present worth: PW = EUAB / (1 + MARR)^n, where n is the life of the alternative in years, we get:
- Alt. A: PW = 82 / (1 + 0.08)^10 = $38.64
- Alt. B: PW = 196 / (1 + 0.08)^10 = $92.63
- Alt. C: PW = 70 / (1 + 0.08)^10 = $33.06
Therefore, Alt. B has the highest present worth, followed by Alt. A and then Alt. C. However, the question asks for the most attractive alternative for a MARR of 8%. Since Alt. C has the highest ROR (Rate of Return) of 11.7%, which is than the MARR of 8%, it is considered the most attractive alternative. Therefore, the answer is true.
To know more about ROR(rate of return)
https://brainly.com/question/29612907
#SPJ11
What are the portfolio weights for a portfolio that has 148 shares of Stock A that sell for $35 per share and 110 shares of Stock B that sell for $24 per share? (Round your answers to 4 decimal places. (e.g., 32.1616))
The portfolio weight for Stock A is 40.15% and for Stock B it is 59.85%. Portfolio weights refer to the percentage of a portfolio's total value that is allocated to each individual stock or asset. They help investors to understand the allocation of their investments across different assets or stocks.
To calculate the portfolio weights for a portfolio with 148 shares of Stock A and 110 shares of Stock B, we need to first calculate the total value of the portfolio.
The total value of the portfolio is calculated as follows:
Total Value = (148 shares of Stock A x $35 per share) + (110 shares of Stock B x $24 per share)
Total Value = $5180
Next, we can calculate the portfolio weights for each stock by dividing the value of each stock by the total value of the portfolio.
Portfolio weight for Stock A = (148 shares of Stock A x $35 per share) / $5180
Portfolio weight for Stock A = 0.4015 or 40.15%
Portfolio weight for Stock B = (110 shares of Stock B x $24 per share) / $5180
Portfolio weight for Stock B = 0.5985 or 59.85%
Therefore, the portfolio weights for the portfolio with 148 shares of Stock A that sell for $35 per share and 110 shares of Stock B that sell for $24 per share are 40.15% for Stock A and 59.85% for Stock B.
In conclusion, portfolio weights help investors to understand the allocation of their investments across different assets or stocks. By calculating the portfolio weights, investors can ensure that their portfolio is well-diversified and that they are not overly exposed to any single asset or stock.
To know more about the portfolio refer here:
https://brainly.com/question/31370133#
#SPJ11
a traditional pension plan that pays a specific amount at retirement based on a formula payout is known as a:
A traditional "pension-plan" that pays a specific amount at retirement based on a formula payout is known as a defined-benefit-plan.
In a "Defined-Benefit-Plan", the employer is responsible for funding the plan and guarantees a specific retirement benefit to employee based on a formula that considers into account the employee's years of service and salary history.
The amount of the retirement benefit is determined by a formula that factors in the employee's years of service and "average-salary" during a certain period, such as the last few years before retirement.
Once the employee retires, they receive a set amount of money(pension) each month for the rest of their life, regardless of how long they live.
Learn more about Defined Benefit Plan here
https://brainly.com/question/28603314
#SPJ4
katherine is purchasing a second home as an investment/vacation property. she has a large down payment, and the seller is financing the rest of the purchase. which of these statements is true? the cfpb provides forms similar to the closing disclosure and loan estimate for seller/financers to use. the closing disclosure and loan estimate aren't required in a seller-financed transaction. the seller is required to provide the same disclosure forms to katherine as a standard lender would provide. the seller will provide the closing disclosure and loan estima
The statements is true is The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction, option B.
Your name, income, Social Security number, the address and market value of the property you're thinking about, and the loan amount you're looking for will all be provided to the lender within three business days.
A five-page document known as a closing disclosure contains the last information on the mortgage loan you've chosen. Three business days at the very least before the planned closing date for your mortgage loan
The Closing Disclosure and Loan Estimate are not necessary in a transaction that is seller-financed. To display the buyer and seller their respective closing amounts, another type of statement may be created.
Learn more about Closing Disclosure and Loan Estimate:
https://brainly.com/question/30262642
#SPJ4
before Exam Bonus - (maximum of 5 points, Tuesday Note: This question is optional. The total score for this exam does not exceed 100 points. Hence, the bonus points will only be awarded to you if your total score is less than 100 points. Butch lives for three periods. He is currently considering three alternative education-work options. 1. He can start working immediately, earning $40,000 in period 1, $100,000 in period 2 (as his work experience leads to higher productivity), and $80,000 in period 3 (as his skills become obsolete and physical abilities deteriorate). 2. He can spend $50,000 to pursue a bachelor's degree in period 1 and then earn $150,000 in periods 2 and 3. 3. He can spend $50,000 to pursue a bachelor's degree in period 1 and then can receive a master's degree in period 2 after completing his college education in period 1. This last option will cost him nothing when he is attending graduate school in the second period as his expenses on tuition and books will be covered by a graduate assistantship. After receiving his master's, he will become a director at a firm and earn $300,000 in period 3. Suppose Butch's discount rate is 20 percent per period. What education path maximizes Butch's net present value of his lifetime earnings?
For option 1 $188,016.53, for option 2 $273,330.56 ,option 3 = $130,353.30. Option 2 has the highest present value of earnings, it is the optimal education path for Butch,
To determine which education path maximizes Butch's net present alue of lifetime earnings, we need to calculate the present value of each option and compare them.
For option 1, we can calculate the present value of his earnings using the formula:
PV = 40,000/(1+0.2)^1 + 100,000/(1+0.2)^2 + 80,000/(1+0.2)^3 = $188,016.53
For option 2, we need to subtract the cost of the bachelor's degree from the present value of his earnings:
PV = (150,000/(1+0.2)^2 + 150,000/(1+0.2)^3) - 50,000/(1+0.2)^1 = $273,330.56
For option 3, we need to calculate the present value of his earnings as a director:
PV = 300,000/(1+0.2)^3 = $130,353.30
Since option 2 has the highest present value of earnings, it is the optimal education path for Butch. However, since this question includes a bonus, we should also consider whether Butch's total score on the exam is less than 100 points. If it is, he will receive a maximum of 5 bonus points, which may change his overall score and alter the outcome of this decision.
Learn more about education here:
https://brainly.com/question/29244723
#SPJ11
How can financial managers minimize exchange rate risk to someextent?
Financial managers can minimize exchange rate risk to some extent by implementing various risk management strategies. These strategies may include hedging, diversification, and using forward contracts.
Financial managers can minimize exchange rate risk to some extent by:
1. Diversifying their investments: By investing in different countries and currencies, financial managers can mitigate the risk associated with fluctuations in a single currency.
2. Utilizing forward contracts: Financial managers can enter into forward contracts to lock in a specific exchange rate for a future date, thereby minimizing the potential impact of unfavorable exchange rate movements.
3. Hedging with currency options: Financial managers can use currency options to protect their company from adverse exchange rate movements by purchasing the right, but not the obligation, to buy or sell a specific currency at a predetermined rate on or before a specific date.
4. Implementing currency swaps: Financial managers can engage in currency swaps to exchange the principal and interest payments of a loan in one currency for equivalent payments in another currency, thus managing the exchange rate risk associated with the loan.
5. Maintaining a balance between payables and receivables: Financial managers can try to match the currency of their payables with the currency of their receivables, thereby reducing the net exposure to exchange rate fluctuations.
By implementing these strategies, financial managers can minimize exchange rate risk to some extent and protect their organization from the potential negative impact of currency fluctuations.
Learn more about hedging with currency:
https://brainly.com/question/29350137
#SPJ11
A customer has ordered goods generating a present value of $800. The present value of production costs is $600. Under what conditions should you extend credit if there is no possibility of repeat orders? A. If the probability of payment exceeds 0.67 B. If the probability of payment exceeds 0.80 C. If the probability of payment exceeds 0.75 D. If the probability of payment exceeds 0.90
When extending credit to a customer who is not likely to make repeat orders, it is important to consider the probability of payment. In this case, the present value of the goods ordered is $800, while the present value of production costs is $600. Therefore, the profit margin is $200. Option B
To determine the appropriate conditions for extending credit, we need to assess the risk of non-payment and consider the probability of receiving payment. Typically, a higher probability of payment would indicate a lower risk of non-payment, and therefore, a greater likelihood of extending credit.
Based on this, we can eliminate options A and C since a probability of payment exceeding 0.67 or 0.75 respectively, may not be sufficient to offset the risk of non-payment. Option D, where the probability of payment exceeds 0.90, may seem like the safest option, but it may not be practical since it may be challenging to find a customer who can guarantee a probability of payment that high.
This leaves us with option B, where the probability of payment exceeds 0.80. This seems like a reasonable and practical condition for extending credit since it provides a high likelihood of payment while also considering the potential profit margin. However, it is important to note that this decision should also be based on other factors, such as the customer's creditworthiness, payment history, and financial stability. Option B.
For more such questions on customer
https://brainly.com/question/26313265
#SPJ11
a second customer has fixed rate debt outstanding, but believes that interest rates will soon fall and wishes to take advantage of that view.
which side of the swap does the customer choose?
1. pay fixed/ receive floating
2. pay floating/receive fixed
To benefit from the expected decline in interest rates, the customer should choose 1. Pay fixed/receive floating.
By choosing this option, the customer will pay a fixed rate on the swap and receive a floating rate. If the interest rates fall, the floating rate will decrease, and the customer will benefit from the lower interest payments received.
A Pay fixed/receive floating swap occurs when one party swaps the interest cash flow of a floating-rate loan held by another party for the interest cash flow of a fixed-rate loan. A fixed-for-floating swap allows you to better match assets and liabilities that are sensitive to interest rate movements. I it is lower than the fixed-rate currently being paid, doing this will reduce interest expense by swapping for a floating rate.
Therefore, the correct option is 1. Pay fixed/receive floating.
To learn more about "interest rates", visit: https://brainly.com/question/29415701
#SPJ11
Expenditures by households on final goods and services is referred to as Multiple Choice investment O disposable income. O consumption. aggregate demand.
Expenditures by households on final goods and services is referred to as consumption.
Consumption is a term used to describe the amount of money spent by individuals or households on goods and services that are used to satisfy their needs or wants. It is a major component of the Gross Domestic Product (GDP) of a country and is calculated by adding up all the spending by households on goods and services during a given period of time.
Consumption is an important factor in determining the level of aggregate demand in an economy and has a direct impact on economic growth and development. In contrast, investment refers to spending on capital goods and services that are used to increase the production of goods and services. Disposable income is the income that remains after taxes and other deductions are taken out, which can be used for consumption or savings purposes.
For more such questions on consumption , click on:
https://brainly.com/question/14786578
#SPJ11
A company has interest expense of $60,000, income taxes expense of $180,200, and net income of $289,000. The company's times interest earned ratio equals:
Multiple ChoiceO 8.82.
O 4.82.
O 7.82.
O 3.00.
O 0.11.
The company's times interest earned (TIE) ratio is calculated by dividing its earnings before interest and taxes (EBIT) by its interest expense and is equals to 8.82. The correct option is A).
The times interest earned (TIE) ratio is calculated as earnings before interest and taxes (EBIT) divided by interest expense.
EBIT = Net income + Income taxes + Interest expense
= $289,000 + $180,200 + $60,000
= $529,200
TIE ratio = EBIT / Interest expense
= $529,200 / $60,000
= 8.82
Therefore, the company's times interest earned (TIE) ratio equals 8.82. The correct answer is (a) 8.82.
To know more about times interest earned:
https://brainly.com/question/10241417
#SPJ4
true or false: the existence of traders attempting to beat the market is a necessary precondition for markets to become efficient.
True,
the existence of traders attempting to beat the market is a necessary precondition for markets to become efficient.
These traders, often referred to as "informed traders" or "arbitrageurs," play a crucial role in making markets more efficient by exploiting any discrepancies in asset prices and constantly seeking profitable opportunities.
Arbitrageurs are individuals or firms that exploit market inefficiencies to make profits by buying and selling similar assets in different markets simultaneously. By doing so, they help to bring prices in different markets closer to their theoretical values and promote market efficiency.
Informed traders are market participants who possess non-public information about a particular security or market. They use this information to make better-informed trading decisions, potentially leading to profits.
However, trading on insider information is illegal, and the use of insider information undermines market integrity and fairness.
Their actions help drive asset prices towards their fair values, ensuring that the market is well-informed and functioning effectively.
To know more about traders refer here:
https://brainly.com/question/14693706#
#SPJ11
what is the key concern during preparation or assembly of foods sold?
The key concern during the preparation or assembly of foods sold is ensuring food safety and preventing foodborne illnesses. This involves several important factors:
Hygiene: Maintaining a clean work environment, including surfaces, utensils, and hands, is essential to avoid contamination of food with harmful microorganisms.Temperature control: Ensuring that foods are stored, cooked, and served at the appropriate temperatures is critical to preventing the growth of harmful bacteria. Cold foods should be stored below 40°F (4°C), and hot foods should be kept at or above 140°F (60°C).Cross-contamination prevention: Separating raw and cooked foods, using designated cutting boards and utensils, and proper handwashing techniques help prevent the transfer of harmful bacteria between different food items.Proper cooking and storage: Cooking foods to their recommended internal temperatures and storing leftovers promptly in airtight containers can reduce the risk of foodborne illnesses.Allergen awareness: Being aware of common food allergens (such as nuts, shellfish, and gluten) and their potential presence in prepared foods is crucial to ensure customer safety and to comply with food labeling regulations.Pest control: Implementing effective pest control measures can prevent contamination from rodents and insects, which can carry harmful pathogens. Staff training: Educating employees on safe food handling practices and hygiene standards is essential for maintaining a safe and clean food preparation environment.By addressing these concerns, businesses can ensure the safety and quality of the foods they sell, protecting customers' health and maintaining a positive reputation in the industry.For more such question on food safety
https://brainly.com/question/10622064
#SPJ11
Volkswagen's supervisory board German company Volkswagen, Europe's largest carmaker, had a supervisory board. In 2005, institutional investors demanded that the chairman of the supervisory board Herr. Pilch, resign because of alleged conflicts of interest. They claimed that H. Piech and his family held significant shares in Porsche, who held a near 20% stake in Volkswagen German's voluntary corporate governance code states that conflicts of interest should result in the termination of a supervisory board members mandate H. Piech claimed that the conflict would be managed by him leaving the room whenever any Porches related matter was discussed. Some American institutional investors called this naive. H. Piech was strongly supported by the ten employee representatives on the 20-strong board, 1. Explain the conflict of interest in the context of the chairman, Herr Piech. (10 marks) 2. Many boards require directors, who declare a conflict of interest, to leave the room when the relevant issue is discussed. What is your opinion of this practice? Is it 'naive' as some investors in this case caimed? (5 marks) 3. Given that H. Piech was strongly supported by all ten employee representatives on the supervisory board, do the shareholder representatives on that board have grounds for complaint? How may the shareholders voice be better heard on the board ? (10 marks)
Shareholders are individuals or entities that own shares in a company. Shareholders provide capital to the company in exchange for ownership stakes or shares, which give them certain rights, such as the right to vote on important matters and receive dividends or a share of the company's profits. Shareholders can be individuals, institutional investors, or other companies.
A supervisory board, also known as a supervisory committee or board of supervisors, is a group of individuals responsible for overseeing and monitoring the management and direction of a company by its executive board or management team. The supervisory board is typically made up of both shareholder and employee representatives, and in some cases, representatives from other stakeholder groups.
1. The conflict of interest in the context of the chairman, Herr Piech, arises from the fact that he and his family held significant shares in Porsche, which held a near 20% stake in Volkswagen. As the chairman of the supervisory board, Herr Piech had a duty to act in the best interests of Volkswagen and all its shareholders, but his significant stake in Porsche could have influenced his decision-making and compromised his impartiality. This could be seen as a conflict of interest as his loyalty to his own interests may have conflicted with his duty to act in the best interest of the company and its shareholders.
2. The practice of requiring directors who declare a conflict of interest to leave the room when the relevant issue is discussed is a standard practice in most boardrooms. This practice is designed to minimize the risk of conflicts of interest and maintain the integrity of the decision-making process. However, in some cases, this practice may not be sufficient to prevent conflicts of interest, as the director may still have an impact on the decision-making process outside the boardroom. Hence, it is important to have clear guidelines and protocols in place to manage conflicts of interest, such as recusal and disclosure policies.
In the case of Herr Piech, the practice of leaving the room whenever any Porsche-related matter was discussed may not have been sufficient to manage his conflict of interest effectively, as his loyalty to his own interests could have influenced his decision-making outside the boardroom. Therefore, the American institutional investors' claim that this practice was naive may have some merit.
3. The fact that Herr Piech was strongly supported by all ten employee representatives on the supervisory board may suggest that the shareholder representatives on the board did not have adequate representation or influence. This highlights the need for a more balanced representation on the supervisory board to ensure that the interests of all stakeholders, including shareholders, are adequately represented.
One way to better hear the shareholders' voice on the board is to increase their representation on the board, either by increasing the number of shareholder representatives or by giving them more voting power. Another approach could be to strengthen the role of independent directors on the board, who are not affiliated with any particular stakeholder group and can act as impartial arbiters of conflicts of interest. Additionally, the board could establish a shareholder committee or forum to provide a platform for shareholders to voice their concerns and engage with the board directly.
Learn more about shareholders https://brainly.com/question/28452798
#SPJ11
You plan to invest $1,170 a year for 5 years at a 7 percent annually? How much will you have in 5 years? Assume the first investment is made in one year.
O $9,311.31
O $6,728.36
O $9,023.31
O $6,259.50
O $3,440.10
After 5 years of investing $1,170 annually at 7 percent, you would have approximately $6,728.36.
To calculate this, we can use the formula for future value of an annuity:
FV = Pmt x [(1 + r)^(n-1) / r]
Where:
- FV is the future value of the annuity
- Pmt is the amount of each payment (in this case, $1,170 per year)
- r is the annual interest rate (7 percent)
- n is the number of years (5)
Plugging in these values, we get:
FV = $1,170 x [(1 + 0.07)^(5-1) / 0.07]
FV = $1,170 x [(1.07)^4 / 0.07]
FV = $1,170 x 5.2469
FV = $6,728.36
Therefore, the correct answer is
To know more about investment click on below link :
https://brainly.com/question/29002399
#SPJ11
1. Assume a USD is worth CAD 0.97, (St=0.97 CAD/USD). Also, a GBP is worth USD 2.05 (St=2.05 USD/GBP). . What is the cross rate CAD/GBP? a. Suppose Kwiki Bank quotes St= 2.15 CAD/GBP.Is arbitrage possible? (Why?)b. If yes, describe a triangular arbitrage strategy and determine an arbitrageur’s profits. [Assume you borrowed USD 1000]
The arbitrageur would make a profit of USD 162.702 by following this triangular arbitrage strategy.
To find the cross rate CAD/GBP, we need to multiply the two given exchange rates:
CAD/USD x USD/GBP = CAD/GBP
Substituting the given rates, we get:
0.97 CAD/USD x 1 USD/2.05 GBP = 0.47268 CAD/GBP
Therefore, the cross rate CAD/GBP is 0.47268 CAD/GBP.
a. To determine if arbitrage is possible, we need to compare the market rate with the cross rate we calculated. If the market rate is different from the cross rate, there is an arbitrage opportunity.
The market rate quoted by Kwiki Bank is 2.15 CAD/GBP, which is higher than the cross rate we calculated (0.47268 CAD/GBP). This means that Kwiki Bank is offering more CAD per GBP than the cross rate suggests.
b. A triangular arbitrage strategy involves taking advantage of price discrepancies between three currencies. In this case, we can use USD, CAD, and GBP to make a risk-free profit.
Here's the strategy:
Borrow USD 1000 at the prevailing interest rate.Convert USD 1000 to CAD at the market rate of 0.97 CAD/USD. This gives us CAD 970.Convert CAD 970 to GBP at the cross rate of 0.47268 CAD/GBP. This gives us GBP 408.626.Invest GBP 408.626 in a GBP-denominated account that earns interest.Wait for the investment to mature and convert the GBP back to USD at the market rate of 2.05 USD/GBP. This gives us USD 837.298.Repay the USD loan and keep the profit, which is USD 837.298 - USD 1000 = -162.702 USD.Therefore, the arbitrageur would make a profit of USD 162.702 by following this triangular arbitrage strategy.
Learn more about profit : brainly.com/question/1078746
#SPJ11
the beginning inventory balance is correct. however, the ending inventory figure was overstated by $20,000. given this information, the correct gross profit would be:
The correct gross profit would be equal to the ending inventory balance minus $30,000.
If the ending inventory figure was overstated by $20,000, it means that the value of inventory at the end of the period was recorded as $20,000 more than it actually was. This would result in an overstatement of the cost of goods sold (COGS) and an understatement of gross profit. To calculate the correct gross profit, we need to adjust the COGS for the overstatement of ending inventory. The formula to calculate gross profit is:
Gross profit = Net sales - Cost of goods sold. Let's assume that net sales for the period were $100,000 and the beginning inventory was $50,000. We also know that the ending inventory was overstated by $20,000.
The cost of goods sold can be calculated as:
Cost of goods sold = Beginning inventory + Purchases - Ending inventory
Since the beginning inventory balance is correct, we can use it as the starting point:
Cost of goods sold = $50,000 + Purchases - (Ending inventory + $20,000)
Cost of goods sold = $50,000 + Purchases - Ending inventory - $20,000
Now we can substitute this equation into the formula for gross profit:
Gross profit = Net sales - ($50,000 + Purchases - Ending inventory - $20,000)
Simplifying the equation:
Gross profit = Net sales - $50,000 - Purchases + Ending inventory + $20,000
We know that net sales were $100,000, and let's assume that purchases were $80,000. Substituting these values, we get:
Gross profit = $100,000 - $50,000 - $80,000 + Ending inventory + $20,000
Simplifying further:
Gross profit = -$10,000 + Ending inventory
Since the ending inventory was overstated by $20,000, we need to subtract this amount to get the correct ending inventory balance:
Gross profit = -$10,000 + Ending inventory - $20,000
Gross profit = -$30,000 + Ending inventory
Learn more about inventory here:
https://brainly.com/question/14184995
#SPJ11
XYZ Inc issued 445 convertible bonds - each at a price of 101.95% of the $1,000 face value. At issuance, similar bonds without the conversion option had a price of 96.01% of the $1,000 face value. The convertible bonds have just been converted. The carrying value of the bonds on the conversion date is $435,300, and the company has paid $12,460 to the bondholders to induce early conversion. Using the book value method and IFRS, how much will the company's common share balance increase with conversion?
Using the book value method and IFRS, XYZ Inc's common share balance will increase by $421,392.25 with the conversion of the convertible bonds.
How much will the company's common share balance increase with conversion?To determine the increase in XYZ Inc's common share balance with conversion, we'll use the book value method under IFRS.
First, let's calculate the carrying value of the bonds at issuance:
445 convertible bonds x $1,000 face value x 101.95% = $453,667.75
Now, let's calculate the value of the conversion option: 445 bonds x $1,000 face value x (101.95% - 96.01%) = $26,367.75
Since the carrying value of the bonds on the conversion date is $435,300, we can calculate the amount paid to bondholders for early conversion and the adjusted carrying value:
$435,300 + $12,460 = $447,760
Now, we can determine the increase in the company's common share balance due to the conversion: $447,760 - $26,367.75 (value of conversion option) = $421,392.25
Learn more about common stock at
https://brainly.com/question/20566576
#SPJ11
Each of the following is considered trade dress except:A. the font and size of print used in a national store's printadvertising.B. the brown uniforms and trucks at UPS.C. the white linen tablecloths at the Four Seasons restaurant inNew York City.D. the costume worn by the university mascot at sportingevents.
Each of the given statements are considered to trade dress except the costume worn by the university mascot at sporting events. So, the correct option is D).
Trade dress refers to the visual appearance of a product or its packaging that signifies the source of the product to consumers. Trade dress can include features such as color, shape, texture, graphics, and even the design of a building or store layout.
Statement describes the font and size of print used in a national store's print advertising, which can be a form of trade dress. other statement describes the brown uniforms and trucks at UPS, which are a distinctive and recognizable part of the company's trade dress.
Another statement describes the white linen table cloths at the Four Seasons restaurant in New York City, which are also part of the restaurant's trade dress. So, the correct answer is option D).
To know more about trade dress:
https://brainly.com/question/28098520
#SPJ4
Class is most often used to analyze stratification in industrialized societies because industrialized societies:O are characterized by income, wealth, occupation, and educationO are characterized by ownership, users, customersO are characterized by control, plan, working
Class is most often used to analyze stratification in industrialized societies because industrialized societies are characterized by income, wealth, occupation, and education, the correct option is (a).
Industrialized societies are often characterized by a complex division of labor and an economic system based on market exchange. This creates a range of occupations and income levels, which contribute to a stratified society.
In addition, education plays an important role in determining one's social status and occupational opportunities. Wealth also plays a crucial role in determining one's social class, as it provides individuals with the resources to secure a better education and more opportunities for economic advancement, the correct option is (a).
To learn more about income follow the link:
https://brainly.com/question/14732695
#SPJ4
The complete question is:
Class is most often used to analyze stratification in industrialized societies because industrialized societies:
a. are characterized by income, wealth, occupation, and education
b. are characterized by ownership, users, customers
c. are characterized by control, plan, working
the measure of forecast error where the amount of error of each forecast is squared and then an average is calculated is group of answer choices
The mean squared error (MSE) is a calculation that squares each forecast's mistake before averaging the results to determine the forecast error.
A frequently used metric to assess the precision of a forecasting model or technique is the MSE. The actual value is subtracted from the predicted value to calculate MSE, which is then calculated by averaging all squared errors. MSE offers a technique to quantify the average degree of forecast error, with higher numbers denoting a higher level of inaccuracy. MSE can be used to compare the effectiveness of various forecasting techniques or models and to pinpoint forecasting process improvement opportunities.
learn more about forecast's here:
https://brainly.com/question/30167588
#SPJ11
A high accounts receivable turnover ratio indicates. Choose the best answer from the following Select one: O A. the company's sales are increasing. O B. a large proportion of the company's sales are on credit. O C. customers are making payments very quickly. O D. customers are making payments very slowly.
The correct answer is C. A high accounts receivable turnover ratio indicates that customers are making payments very quickly.
This is because the ratio measures how many times a company's accounts receivable is collected and paid off during a specific period, indicating the efficiency of the company's collection process. A higher ratio suggests that customers are paying their debts faster, which is a positive sign for the company's cash flow and financial health.A high accounts receivable turnover ratio is an important financial metric that measures the efficiency of a company's collections process. It indicates how quickly a company collects outstanding debts from customers. A high ratio is generally considered a good sign for the financial health of the company.
learn more about turnover ratio here:
https://brainly.com/question/27523896
#SPJ11
suppose that the federal reserve bank wants to address high levels of unemployment in the economy. to do so, it would likely seek to increase . if the federal reserve bank is able to instigate the growth it desires, it will likely come at the cost of increasing . suppose that the federal reserve bank achieves the growth it wants, but also experiences the negative consequences. as a result, it will seek to decrease at the risk of leading the economy into a .
If the Federal Reserve Bank wants to address high levels of unemployment in the economy, it would likely seek to increase economic growth. However, if the Federal Reserve Bank is able to instigate the growth it desires, it will likely come at the cost of increasing inflation. Suppose that the Federal Reserve Bank achieves the growth it wants, but also experiences the negative consequences. As a result, it will seek to decrease inflation at the risk of leading the economy into a recession.
Suppose that the Federal Reserve Bank wants to address high levels of unemployment in the economy. To do so, it would likely seek to increase the money supply and lower interest rates. This would encourage borrowing and investment, stimulating economic growth and job creation. If the Federal Reserve Bank is able to instigate the growth it desires, it will likely come at the cost of increasing inflation.
Suppose that the Federal Reserve Bank achieves the growth it wants, but also experiences the negative consequences of higher inflation. As a result, it will seek to decrease the money supply and raise interest rates at the risk of leading the economy into a recession. This illustrates the delicate balance that central banks must maintain when managing monetary policy to address unemployment and inflation concerns.
Learn more about inflation here: brainly.com/question/30112292
#SPJ11
The common stock and debt of Android Corp. are valued at $57million and $32 million, respectively. Investors currently requirea 10% return on the common stock and a 9% return on the debt. There are no taxes.
Calculate the weighted average cost of capital. Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign in your answers.
The weighted average cost of capital for Android Corp. is 9.64%. To calculate the weighted average cost of capital (WACC) for Android Corp., we need to consider the values of common stock and debt, as well as the required returns on each. Here are the steps to calculate WACC:
Common Stock Proportion = Common Stock Value / (Common Stock Value + Debt Value)
Debt Proportion = Debt Value / (Common Stock Value + Debt Value)
Weighted Common Stock Return = Common Stock Proportion * Required Common Stock Return
Weighted Debt Return = Debt Proportion * Required Debt Return
WACC = Weighted Common Stock Return + Weighted Debt Return
Now, let's apply these steps using the given values:
Common Stock Proportion = $57 million / ($57 million + $32 million) = 0.64
Debt Proportion = $32 million / ($57 million + $32 million) = 0.36
Weighted Common Stock Return = 0.64 * 10% = 0.064 (or 6.4%)
Weighted Debt Return = 0.36 * 9% = 0.0324 (or 3.24%)
WACC = 6.4% + 3.24% = 9.64%
The weighted average cost of capital for Android Corp. is 9.64%, rounded to two decimal places.
To know more about capital refer: https://brainly.com/question/23631000
#SPJ11
the cost of preferred stock, rps, used in the weighted average cost of capital equation is calculated as the preferred dividend, dps, divided by the current price of the preferred stock, pps. -select- tax adjustment is made when calculating rps because preferred dividends -select- tax deductible; so -select- tax savings are associated with preferred stock. quantitative problem: barton industries can issue perpetual preferred stock at a price of $45 per share. the stock would pay a constant annual dividend of $3.40 per share. if the firm's marginal tax rate is 40%, what is the company's cost of preferred stock? round your answer to 2 decimal places. %
The company's cost of preferred stock upto 2 decimal places is equal to 4.54%.
To calculate the cost of preferred stock, we can use the formula:
rps = dps / pps
where:
dps = annual dividend per share of preferred stock
pps = current price per share of preferred stock
In this case, dps = $3.40 per share, and pps = $45 per share. Therefore:
rps = $3.40 / $45 = 0.0756 or 7.56%
However, we need to adjust for taxes since preferred dividends are not tax-deductible. To do this, we can use the formula:
rps(1 - tax rate) = rps(1 - 0.4) = 0.0756(0.6) = 0.04536 or 4.54%
Therefore, the cost of preferred stock for Barton Industries is 4.54%.
Learn more about dividend per share at:
brainly.com/question/31366921
#SPJ4
