Answer:
The correct answer is letter "D": All securities in an efficient market are zero net present value investments.
Explanation:
The Efficient Market Hypothesis (EMH) states that neither public or insider information cannot help in an attempt to beat the market because stocks already show all available information possible. Thus, neither using technical or fundamental analysis could be useful to predict future stock price movement.
<em>In other words, in a market under EMH all stocks are zero Net Present Value (present value inflows minus present value outflows) investment vehicles.</em>
Answer:
C) defensive
Explanation:
Defensive stocks are stocks that generally perform well during economic recessions. In other words, their price is not related to the market tendency. Even if the market goes down, their price remains stable. Generally companies that sell products with a constant demand are considered defensive stocks, e.g. Costco, Target, Walmart, utilities (all, electric, gas, water), etc.
<span>E. Conceptual and decision</span><span>
The Internal auditor is the person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate.
Internal audit within the company is not only done to review operating and accounting control procedures but to recommend ways that will further operation and accounting control within the company. </span>
Answer:
The correct answer is:
Establishing a code of ethics
Referring ethical dilemmas to an ethics committee
Providing support for whistleblowers
Explanation:
The ethics of the company tries to apply ethical principles in decision-making and concrete actions, and provides tools that raise the ethical level of companies.
Business ethics includes the moral principles and norms that guide behavior in the business world. In fact, there are people who think that their personal values and principles have nothing to do with those presented in their work environment. This is a mistake, when an ethical person works in a company where ethics remains, this person will have a place where he can develop his full potential and his degree of loyalty will be unimaginable.
Companies when they want to define their code of ethics, integrate a series of values such as honesty, loyalty, integrity, innovation, quality, respect for the individual, among others.
Answer: b. The diversifiable risk of your portfolio will likely decline, but the expected market risk should not change.
Explanation:
Diversifiable risk is a risk that a particular security has or which can be seen in a certain sector. Market risk occurs when there's possibility that a particular investor will make loss due to certain factors which affects the entire market.
In the above scenario, the most likely to occur will be that the diversifiable risk of the portfolio will likely decline, but the expected market risk should not change.
It should be noted that diversification won't eliminate market risk. When more stocks are added, this brings about decline in diversification risk but market risk won't change.
