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Lana71 [14]
3 years ago
13

"You expect General Motors (GM) to have a beta of 1.5 over the next year, and the beta of Exxon Mobil (XOM) to be 1 over the nex

t year. Also, you expect the volatility (i.e. the standard deviation of returns) of GM to be 40%, and that of XOM to be 60% over the next year. Which stock has more systematic risk? Which stock has more total risk?
A. XOM, GM

B. XOM, XOM

C. GM, XOM

D. GM, GM
Business
1 answer:
natka813 [3]3 years ago
3 0

Answer:

Stock of GM has more systematic risk while stock Exxon Mobil has more total risk. So C. GM, XOM is the correct option.

Explanation:

Systematic risk is a risk that is inherent in the market and is undiversifiable. The beta is the measure of systematic risk. The beta of market is always 1 and any stock with a higher beta has a higher systematic risk,

The total risk is the sum of both systematic and unsystematic risk. The unsystematic risk is a risk that is firm specific and is diversifiable through forming a portfolio and diversifying it. The standard deviation is a measure of the total risk and the higher the standard deviation, the higher the total risk.

Stock of GM has a higher beta than that of Exxon thus it has a higher systematic risk. Stock of Exxon has a higher standard deviation thus it has a higher total risk.

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Lauren hires Humphrey, a CPA, to audit her financial statements. The engagement letter includes a statement acknowledging that a
klio [65]

Answer:

it was a foreseen party

Explanation:

Key Largo bank would most likely sue Humphrey on the ground that it was a foreseen party. This is because Humphrey(CPA) being an auditor, knew that the audited financial statements are required for a filing with the regulatory body. Moreover, the auditing firm- Humphrey knew about the specific purpose of the audit report including the fact that his or her opinion(report) will will relied upon by other parties hence a foreseen third party for the auditor.

Based on the aforementioned, Key Largo Bank can sue Humphrey because he is aware of the intended purpose of the audit report.

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4 years ago
Jeff works as a computer repair technician
lubasha [3.4K]
The answer to the question above as to what types of income does Jeff have if he works as a computer repair technician and he has money in a savings account and he owns some stock as an investment, Jeff gains his income through salary from his job as a repair technician, interest in the savings account and dividend in the stocks.
7 0
3 years ago
Read 2 more answers
Which of the following describes the activities that play an important role in connecting brands to consumers in the final phase
expeople1 [14]

The activity that play an important role in connecting brands to consumers in the final phases of the buying process is C. Retailing.

<h3>What is the role of retailing in the buying process?</h3>

Retailing refers to the set of activities that allow for  consumers to be able to access goods and services that were produced by different companies and brands. The process of retailing often comes in the final phases of the buying project as it involves the consumers who are the end stage of the buying process as they are the ones to consume the goods and services being sold.

Retailing is therefore hugely important because it connects the brands to the consumers that they serve . Without retailing, companies would make products and services and be unable to sell them to anyone as they would not have any connection to the final consumers .

Find out more on retailing at brainly.com/question/29357664

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8 0
1 year ago
Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $31.00 per share. The firm'
Setler [38]

Answer:

Cost of external equity= 26.9%

Explanation

<em>According to the dividend valuation, the value of a stock is the present value of expected future dividends discounted at the required rate of return.</em>

The model can me modified to determined the cost of equity having flotation cost as follows:

Ke = D(1+r )/P(1-f) + g

Ke= Cost of equity

D- current dividend,

D(1+g) - dividend next year

p- price of stock - 31,00$

f - flotation cost - 14%

g- growth rate - 7%

Ke= 5.30/31× (1-0.14)  +  0.07

 = 0.2687997  × 100

= 26.9%

4 0
3 years ago
Negative Impact of crime on a business​
iragen [17]

Answer:

● The facts of crimes in business. With the sluggish economy the entire numbers of criminal activities have increased dramatically...

● Loss of revenue. Once the business is been compromised by such crimes, it would not be easy anymore to run the business because the funds are already affected.

● Damaged Reputation...

● Reduced production...

● Protect your business...

Explanation:

7 0
3 years ago
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