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marusya05 [52]
1 year ago
5

The process of buying an underpriced security and selling an equivalent overpriced security until the prices converge is known a

s arbitrage.a. Trueb. False
Business
1 answer:
ipn [44]1 year ago
7 0

The process of buying an underpriced security and selling an equivalent overpriced security until the prices converge is known as arbitrage. This statement is true.

<h3>What Is Arbitrage?</h3>

The arbitrage approach, used in foreign exchange trading, allows investors to lock in profits by simultaneously buying and selling the same security, good, or currency on two different marketplaces. By using this strategy, traders can profit from the disparities in pricing for the same asset across the two different regions that are represented on each side of the trade.

Arbitrage is the practice of purchasing an underpriced security and selling an equivalently-priced asset until the prices converge. Trading on illegal insider knowledge may result in abnormal profits even if the efficient market theory is accurate in a semi-strong sense.

To know more about Arbitrage, refer:

brainly.com/question/16178885

#SPJ4

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A large stock dividend:
Sladkaya [172]

Answer:

Results in a transfer of retained earnings to common stock and additional paid-in capital.

Explanation:

A stock dividend can be defined as the dividend which is distributed to shareholders on the basis of their percentage of ownership. Stock dividend is paid in form of shares and not in form of cash.

A stock dividend can also be described as a dividend payment paid by a company to its existing stakeholders from the profit or earnings that has been derived from the company during a financial year period.

The main advantage of stock dividend is that taxes will not be paid on the stock dividends until the shares have been sold.

5 0
3 years ago
Initially, a reduction in export subsidies decreases net exports at any given real exchange rate, causing the demand for dollars
romanna [79]

Answer:

Decreases; increasing

Explanation:

However, the reduction in expenditure on export subsidies <u>decreases </u>the fiscal deficit, thereby <u>increasing</u> public saving.

National savings refers to the sum of public and private savings. Public savings is the government budget balance. An increase in the balance or decrease in deficit implies the public savings increase and also increase in national savings. Then, the decrease in subsidy spending decreases government deficit and increases national savings and supply of loanable funds, so the loanable funds shift to the right.

8 0
2 years ago
Amy​ Parker, a​ 22-year-old and newly hired marine​ biologist, is quick to admit that she does not plan to keep close tabs on ho
Otrada [13]

Answer:

$1,213,657.685

Explanation:

For computation of compounded future value first we need to find out the present worth which is shown below:-

Present\ worth = Initial\ amount\ of\ investment\times \frac{(1 - (1 + g)^n \times (1 + i)^{-n}}{i - g}

= \$2,250\times  (\frac{(1 - (1 + 0.04)^{45}\times (1 + 0.06)^{-45}}{0.06 - 0.04})\\\\ = \$2,250 \times \frac{1-0.216245988}{0.02}

= $88,172.32636

Now, Future value = Present worth × (1 + interest rate)^number of years

= $88,172.32636  × (1 + 6%)^45

= $1,213,657.685

Therefore we have applied the above formula to determine the future value.

4 0
3 years ago
8 Hospital administrator Jake Rosen9 was recently con victed for fraud he committed against his employer, Cedar Hospital Systems
Alenkinab [10]

Answer:

Asset Misappropriation.

Explanation:

The type of fraud that Jake Rosen engaged in is called Asset Misappropriation.

Asset Misappropriation happens when a person diverts the assets of the company they work for or the client they represent, for their own personal use.

Jake Rosen diverted the funds of the hospital for his own personal use to enabled the purchase of two homes and a nice yacht amongst other things thereby making him guilty of asset misappropriation.

5 0
3 years ago
When the economy starts expanding there is a/an __________ in the term premium and a/an ___________ in the risk premium. Group o
makkiz [27]

Answer:

Increase in premium

Decrease in the risk premium

Explanation:

Premium can be  defined as the rewards earned by investors who has decided to engage in new businesses in a risk free state while risk premium is defined as the excess reward earned above the free risk rate that is expected to earn in the course of investment.In order word , it is a form of compensation for the risk undertaken .

As economy starts expanding , one of the consequences is that the premium will increase while the development reduces related risks and risk premium reduces.

3 0
3 years ago
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