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Mademuasel [1]
3 years ago
11

Which of the following is TRUE of​ risk? A. Risk and return are inversely proportionate to each other. B. Riskier investments te

nd to have lower returns as compared to Tdashbills which are risk free. C. Higher the risk associated with a security the lower is its return. D. Risk is a measure of the uncertainty surrounding the return that an investment will earn.
Business
1 answer:
scoray [572]3 years ago
7 0

Answer:

The answer is: D) Risk is a measure of the uncertainty surrounding the return that an investment will earn.

Explanation:

Investment risk refers to the probability of losing an investment.  It measures the uncertainty level of earning returns from an investment.

When an investor anticipates a higher risk, he will expect higher returns. On the contrary, low risk investments (e.g. T-Bills) offer very low yields.

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Suppose the marginal propensity to consume is equal to 0.75. If the government lowers tax rates and tax revenue falls by $100 mi
vovikov84 [41]

Answer:

$100; $75

Explanation:

Given that:

  • Tax revenue falls by 100 million dollars
  • marginal propensity to consume (MPC) is 0.75.

Due to the fall in tax revenue, disposable income will increase by the same amount, that is, $100 million.

Consuption spending will initially increase by $75 million, as shown below:

= MPC × tax revenue fall

= 0.75 × $100,000,000 = $75,000,000

6 0
3 years ago
Rahls issues stock to investors for $20,000, and has $5,000 of net income in its first year of operations. During Year 2, Rahls
Eva8 [605]

Answer:

The balance in stockholders' equity at the end of year 2 is $31,000

Explanation:

For computing the balance in stockholder equity at the end of year 2, first, we have to compute the balance for year 1  which is shown below:

Year 1 equity balance = Issue of stock + Net income

                                     = $20,000 + $5,000

                                     = $25,000

Now, year 2 balance would equal to

= Year 1 balance + Net income - Dividend paid

= $25,000 + $10,000 - $4,000

= $31,000

Hence, the balance in stockholders' equity at the end of year 2 is $31,000

4 0
3 years ago
Two roadway designs are under consideration for access to a permanent suspension bridge. Design 1A will cost $1.7 million to bui
Vladimir79 [104]

Answer and Explanation:

A. Given that Design 1A will cost $1.7 million to build and $175,000 per year to maintain

Given that Design 1B will cost $3.6 million to build and $40,000 per year to maintain

Both designs are assumed to be permanent

To find ROR using AW based rate of return equation, we find present value of each design and equate them:

Each design is permanent so

Present value of perpetuity:

Design 1A= 1700000+175000/r

Design 1B = 3600000+40000/r

=1700000+175000/r=3600000+40000/r

135000/r=1900000

Cross multiply

r=135000/1900000

r= 0.0710

r=7.10%

B Given that ROR=7.10% and MARR is 25%

MARR>ROR

Hence we reject both designs

5 0
3 years ago
During its first year of operations, Bramble Corp. had these transactions pertaining to its common stock. Jan. 10 Issued 25,200
crimeas [40]

Answer and Explanation:

The journal entries are shown below:

a.

On Jan 10

Cash Dr $100,800 (25200 shares × $4 )

              To Common Stock  $100,800

(Being the common stock is issued)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder so common stock is credited

On July 1

Cash $357,000  (51,000 shares × $7)

     To Common stock $204,000  (51,000 shares × $4)

      To Additional Paid in capital in excess of par value - Common stock   $153,000  (51,000 shares × $3)

(Being the issuance of the common stock is recorded)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock

b.

On Jan 10

Cash $100,800  (25,200 shares × $4)

     To Common stock $25,200  (25,200 shares × $1)

      To Additional Paid in capital in - Common stock   $75,600   (25,200 shares × $3)

(Being the issuance of the common stock is recorded)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock

On July 1

Cash $357,000  (51,000 shares × $7)

     To Common stock $51,000  (51,000 shares × $1)

      To Additional Paid in capital in - Common stock   $306,000   (51,000 shares × $6)

(Being the issuance of the common stock is recorded)

To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock

8 0
3 years ago
________ exists when a large number of firms produce goods that are similar but customers believe there is a difference.
hichkok12 [17]

Answer:

Monopolistic Competition

Explanation:

4 0
3 years ago
Read 2 more answers
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