True, a market correction is defined as a stock market decline of 10% or more.
What Is a Correction?
In investing, a correction is usually defined as a decline of 10% or more in the price of a security from its most recent peak.
Corrections can happen to individual assets, like an individual stock or bond, or to an index measuring a group of assets.
An asset, index, or market may fall into a correction either briefly or for sustained periods—days, weeks, months, or even longer. However, the average market correction is short-lived and lasts anywhere between three and four months.
Investors, traders, and analysts use charting methods to predict and track corrections.
Many factors can trigger a correction. From a large-scale macroeconomic shift to problems in a single company's management plan, the reasons behind a correction are as varied as the stocks, indexes, or markets they affect.
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Answer:
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Answer:
Project A is more valuable than Project B given a positive discount rate.
Explanation:
Let us assume the Discount Rate be r and cash flow for year n be CFn
Also
Let us assume initial Investment be X
So,
NPV = ΣCFn ÷ (1+r)^n
NPVA = - X + 6500 ÷ (1 + r) + 4500 ÷ (1+r)^2 + 2500 ÷ (1+r)^3
NPVB = - X + 2500 ÷ (1+r) + 4500 ÷ (1+r)^2 + 6500 ÷ (1+r)^3
NPVA - NPVB = - X + 6500 ÷ (1+r) + 4500 ÷ (1+r)^2 + 2500 ÷ (1+r)^3 - (- X + 2500 ÷ (1+r) + 4500 ÷ (1+r)^2 + 6500 ÷ (1+r)^3)
= 4000 ÷ (1+r) - 4000 ÷ (1+r)^3 = 4000(1 ÷ (1+r) - 1 ÷ (1+r)^3)
In the case when
Ir > 0, 1 ÷ (1+r) > 1 ÷ (1+r)^3
So,
NPVA - NPVB > 0 => NPVA > NPVB
<span>In the context of swot analysis, the marketers at beta inc. are most likely to consider this situation as a threat.
The new competitor threatens Beta inc. by offering the same consumers, that Beta inc. targets, the same, or similar, products for lower prices than Beta inc. These consumers, given the choice between the new competitor and Beta inc., will most likely do business with the new competitor; for reasons aforementioned.</span>