Answer:
They should invest $5,119,047.619 today.
Explanation:
The trust fund will pay a fixed amount forever thus it is a perpetuity. The value of perpetuity or Price of perpetuity is the amount that the perpetuity is worth in today's terms based on the cash flows it will generate in future.
The formula for the value or price of perpetuity is,
P0 or V = Cash Flow / r
Thus,
P0 or V = 215000 / 0.04 = $5,119,047.619
B. underperform those who hold investments for the long term and trade infrequently.
Research indicates that investors who closely monitor their portfolios and trade quickly in response to minor fluctuations in price underperform those who hold investments for the long term and trade infrequently.
<h3>Why do investors underperform?</h3>
Market timing is the first explanation. Individual investors attempt to decide whether to invest in stocks and when to withdraw funds from them. Despite the fact that we are aware of the market's unpredictability, investors frequently invest during bull markets and exit during down markets. This is seen in the money flows into and out of mutual funds during stock market extremes. Your return will be negatively impacted if you buy high and sell low.
The fees that investors spend are the second factor contributing to their poor market performance. The majority of investors are unaware of their costs and don't care. They fail to understand how a few dollars here and there could possibly make a difference. They believe the fees and charges don't exist since they can't see them.
Learn more about investors here:
brainly.com/question/13602963
#SPJ4
Answer:
The correct answer is option b.
Explanation:
A pure competition is theoretical market structure with very large number of buyers and sellers, identical or homogenous products and freedom of entry and exit.
It is not applicable to the real world and is purely theoretical.
The perfect competition, on the other hand, is a similar market structure but it the consumers have perfect knowledge about the market.
Collusion is legal in most countries as it form part of the oligopoly but in South Africa it is not legal for companies to collude on prices. As evidence, the Competition Commission has fined several SA companies for price collusion.
Answer:
Explained below.
Explanation:
Any mutual administrator fund of a country capital wishes to hedge the portfolio toward a market deterioration. A most helpful strategy is to buy <u>narrow-based puts</u>, the "country" fund is composed of the stocks of companies located in a single country, such as the Japan Fund; or the Mexico Fund. The buoyancy of such funds varies from the buoyancy of the market as a whole. One best way to hedge is with index puts, such as the Japan index choice; or the Mexico index selection. These are narrow-based agreements.