Answer:
a. evaluative criteria
Explanation:
Evaluation Criteria: used by a consumer when using choosing between alternatives. Things that can be put into considerations can be features, quality and price for a consumer to come into conclusion on what type to buy
Answer:
230
Explanation:
Good A has an income elasticity of -1.5. The goods is an inferior good since it has a negative income elasticity. An increase in income reduces its demand, but a decline in income increases its demand.
Fraol’s income has decreased. He will demand more of good A.
the formula for calculating income elasticity is as follows
Income elasticity of a good = % Change in demand/ % change in income.
i.e - 1.5 = % Change in demand/ % change in income.
% change in income =( 40,000 -36,000)/40,000 x 100
=4,000/40,000 x 100
=10%
-1.5 = %CD/10
%CD= 10 x -1.5
%change in demand = 15%
the new demand will be( 15% x 200 ) + 200
=(15/100 x 200 )+200
=(0.15x200) +200
=30 +200
=230
Answer:
The answer is: The current share price is $47.96.
Explanation:
The current share price is equal to the present value of its expected dividend stream discounting at required return rate of 16%.
We have the dividend stream as followed:
Year 1: $22.00; Year 2:$10.00; Year 3: $8.20; Year 4: $2.80; Year 5: $2.80 * 1.05 = $2,94 and will be growing at 5% constantly afterward ( as dividend will be growing at 5% per year from Year 4 afterward).
So, the current share price is equal to:
22/1.16 + 10/1.16^2 + 8.2/1.16^3 + 2.8/1.16^4 + [Present value as at the end of year 4 of growing perpetuity which is dividend payment after year 4] / 1.16^4 = 33.20 + [ 2.94 / ( 16% - 5%) ] /1.16^4 = $47.96.
So, the current share price is $47.96.
Answer:
0.296875
Explanation:
Given the following :
Probability distribution of risky funds :
- - - - - - - - - - - - - - stock fund(S) - - bond fund(B)
Expected return - - - 15% - - - - - - - - - - 9%
Std - - - - - - - - - - - - - 32% - - - - - - - - - - 23%
Correlation between funds return = 0.15
Sure rate = 5.5%
To calculate the Sharpe ratio we use the formula :
Sharpe Ratio = (Expected Return of Investment - Risk Free Rate) / Standard Deviation of excess return of investment
For the stock fund :
Expected return = 15%
Risk free rate = market sure rate = 5.5%
Standard deviation = 32%
Sharpe ratio of stock fund :
(15% - 5.5%) / 32%
= 9.5% / 32%
= 0.296875
For Bond fund :
Expected return = 9%
Risk free rate = market sure rate = 5.5%
Standard deviation = 23%
Sharpe ratio of bond fund :
(9% - 5.5%) / 23%
= 3.5% / 23%
= 0.1521739
Therefore the Sharpe ratio of the best feasible CAL is the higher of the two ratios which is 0.296875
Answer:
Thr correct answer is b. high.
Explanation:
New investment is usually put into an economy when profit expectations are high.
The rate of economic growth (means profit opportunity) affects the level of investment. Business investment tends to be quite volatile. If businesses see an improvement in economic forecasts, they will increase investment to meet future demand. Therefore, an improvement in the rate of economic growth can cause a substantial rise in investment. But, if there is an economic downturn and a fall in the rate of economic growth, business will cut back on investment.
However, in addition, to the profit expectations, the level of investment also depends on the rate of interest, business confidence, technological progress and, government regulations and policies .