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s344n2d4d5 [400]
3 years ago
13

Expected return is defined as _____. A. the summed value of each possible rate of return weighted by its probability B. the summ

ed value of each possible rate of return discounted for inflation C. the average probability of profit on a fair investment D. the expected probability of high returns on an investment
Business
1 answer:
Sholpan [36]3 years ago
4 0

Answer: A. the summed value of each possible rate of return weighted by its probability

Explanation:

The Expected Return of a project is indeed the summed value of each possible rate of return weighted by its probability.

When going into a project, a financial analyst has to account for the possible outcomes that could happen such as interest rates rising or falling.

They then take the various likelihoods and assign rates of returns to them that are either known or anticipated. They will then give each likelihood a probability of it occuring and then give a Weighted Average of these probabilities along with the rates of returns for those likelihoods.

The summed figured that they get is what is known as the Expected return and it includes the various likelihoods that could happen to the project.

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Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players: Movietoni
Marina CMI [18]

Answer:

pricing low

yes

Explanation:

Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.

Dominant strategy is the best option for a player regardless of what the other player is playing.

Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.

if either firm charges high, they either earn 11 million or 2 million.

if either firm charges low, it would earn either 15 million or 8 million.

because the payoffs of charging low is higher than the payoffs of charging high, the best strategy is for the firms to charge low if there is no cooperation.

the game is a prisoners dilemma because the choice the firms make isn't the choice that will yield the highest payoffs. the choice that would yield the highest payoffs is to both charge high prices.

4 0
3 years ago
Get Smart University is contemplating an increase in tuition to enhance revenue. If GSU feels that raising tuition would enhance
Vikentia [17]

Answer:

Correct option is (b)

Explanation:

Price elasticity of demand is the law that states that proportion of percentage change in demand due to percentage change in price only and not any other factors. Demand is perfectly elastic if quantity demanded changes tremendously with change in price. Demand is inelastic if there is no change in quantity demanded with increase in price.

Here, Get smart university plans to increase tuition fees assuming that there will be no change in demand for the seats offered by the university due to increase in price. So, it assumes that demand is inelastic.

5 0
3 years ago
"Problems and Applications Q2
Marysya12 [62]

Answer:

When the Feds sells bond in open market, it INCREASE the money supply.

If the Feds want to decrease the money supply in THE ECONOMY, it can INCREASE the reserve requirements.

When the Feds increases the interest rate it pays on reserve, the money supply will DECREASE.

When Fomc decrease it target for the federal funds rate, the money supply will INCREASE.

When Citibank repays a loan it had previously taken from the Feds, it DECREASES the money supply.

6 0
3 years ago
Park Ridge Company is considering the replacement of a machine that is presently used in production. The following data are avai
Ainat [17]

Answer:

The Relevant Cost for Five Years     $52,000.00

Explanation:

‘Relevant costs’ can be defined as any cost relevant to a decision. A matter is relevant if there is a change in cash flow that is caused by the decision.

The Park Ridge Company's Relevant Old Machine Cost for Five Years is

Disposal value now                      $32,000.00  

Annual cash operating costs      $20,000.00

Relevant Cost for Five Years     $52,000.00

Old Machine

Original cost $200,000 is <em>Sunk Cost</em>

Useful life in years 10 5   - <em>Will be used for the calculation of Depreciation, Therefore is an Irrelevant cost</em>

Current age in years 5 0  - <em>irrelevant year</em>

Book value $100,000 -  <em>are not cash flows and so are not relevant. </em>

Disposal value now $32,000 -  

Disposal value in 5 years 0 <em>is without a cost</em>

4 0
3 years ago
Because services are inseparable, they cannot be tried before they are purchased. To counteract this, a service firm might:
Marina CMI [18]

Answer:

A, Offer a guarantee for the customer's complete satisfaction.

Explanation:

SInce services are inseperable beacuse there cannot be trials unlike in some goods, the only way to keep a customer's mind at rest over the service he or she is getting to give a guarantee as to the quality of the service such that the customer is satisfied and can purchase the service.

For example, giving a customer a time frame for the durability of a service and also a consideration for re-service before the set or supposed time is a way of giving customer guarantee about a service he or she is purchasing

.

Cheers.

3 0
3 years ago
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