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3 years ago

Once a customer has committed to a partnership, less work is needed to maintain the relationship.

1 answer:

4 0

The answer to the given statement above is false, it is because even if a person has entered a partnership, it does not mean less work and effort should be done to maintain the relationship because having no effort in maintaining this relationship could only cause the bond to diminish and destroy. It is best to have an equal amount of work done in order to maintain a relationship with the partner.

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Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlat

White raven [17]

Complete question:

Consider the following information for stocks A, B and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is each of the correlation coefficients is between 0 and 1). Fund P has one-third of its funds invested in each of the three stocks and the risk-free rate is 5.5%.

Stock Expected Return Standard Deviation Beta

A 9.55% 15% 0.9

B 10.45% 15% 1.1

C 12.70% 15% 1.6

a. What is the market risk premium?

b. What is the beta of Fund P?

c. What is the required return of Fund P?

d. Would you expect the standard deviation of Fund P to be less than 15%, equal to 15% or greater than 15%? Explain.

Answer:

1. $4.50

2. 1.2

3. 10.9

4. <15%

Explanation:

a) Computation of the market risk premium.We have,

Accounting to CAPM model.We have,

Expected Return = Risk-free rate of return + Beta x Risk premium

9.55 = 5.5 + .9 x Risk premium

Risk Premium = (9.55 - 5.50) / 0.9 = $ 4.50

Hence, the market risk premium is $ 4.50

(b) Computation of the beta of Fund P.We have,

Average of beta = ( 0.9 +1.1 + 1.6) / 3 = 1.20

Hence,the beta of fund P is 1.20

Required Return = Risk-free rate of return + Beta x Risk premium

Required Return = 5.5 + 1.20 x 4.50

Required return = 10.9 %

Hence, the required return of fund P is 10.9%

(d) If the correlation coefficient of portfolio shall be 1.In this situation unsystematic risk can not be diversified.So, The standard deviation of the fund P is equal to 15%.

If the correlation coefficient of portfolio shall be range of 0 to 1.In this situation unsystematic risk can be little bit diversified.So, The standard deviation of the fund P should be less than 15%.

5 0

3 years ago

The Bubbly Soda Company is creating written correspondence to send to customers in the Midwest. The company decides to refer to

RoseWind [281]

Answer: Location.

Explanation:

The Bubbly soda company adjusted their products name when writing to their customers from the Midwest region to suit the location they are from. The company understands that by using certain terms common to people from a particular location, the people would easily relate to a message.

8 0

4 years ago

What is utility in business and marketing

svp [43]

Answer:

Utility marketing is the concept whereby a brand intersects the consumer at the moment of a non-commercial need, addresses their need, becomes a part of their life, and remains with them for when they're ultimately ready to make a purchase.

3 0

3 years ago

Headland Mining Company purchased land on February 1, 2020, at a cost of $1,169,500. It estimated that a total of 52,800 tons of

Nat2105 [25]

Answer:

1. $26 per unit

2. $183,040

3. $503,360

Explanation:

1. Computation of per unit mineral cost

Per unit mineral cost=(1,169,500+96,300+214,000-107,000)/52,800

Per unit mineral cost=1,372,800/52,800

Per unit mineral cost=$26 per unit

Therefore the Per unit mineral cost will be $26 per unit

2. Computation of Total materials cost

Total materials cost= (26,400 tons-19,360 tons)*26

Total materials cost=7,040*26

Total materials cost=$183,040

Therefore the Total materials cost will be $183,040

3. Calculation for the Total materials cost in Cost of goods sold

Total materials cost in Cost of goods sold= (19,360*26)

Total materials cost in Cost of goods sold =$503,360

Therefore the Total materials cost in Cost of goods sold will be $503,360

8 0

4 years ago

On January 1, 2013, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase o

evablogger [386]

Solution:

Dec 31 2013

Compensation Expenses $200,000

Paid in Capital- Stock Options $200,000

*To record compensation expense for 2013

Computation-Compensation Expense= 400,000/2= $200,000

Dec 31 2014

Compensation Expenses $200,000

Paid in Capital- Stock Options $200,000

*To record compensation expense for 2013

Computation- Compensation Expense= 400,000/2= $200,000

Dec 31 2015

Cash $240,000

Paid in Capital- Stock Options $320,000

Common Stock $40,000

Paid in capital – in excess of par common stocks $520,000

*To record stock option for 5 years and market price $30 with a balance record in the PIC in excess of common stock, 8,000 option exercised out of 10,000

Computation-

PIC- stock options- 400,000 X 80%= $320,000

Common stock = 8,000 X 5 per share= $40,000

80%= amount of stock options redeemed.

8,000/10,000= 80%

Dec 31, 2017

PIC- stock options $80,000

PIC- Expired Stock Options $80,000

*To record paid in capital- stock option for 2017 which is $80,000

Computation= 400,000 X 20%= $80,000

20% = amount of stocks that were not redeemed.

4 0

4 years ago