Answer:
As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.
The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.
Explanation:
The systematic risk is the risk caused by factors that affect all of the market and are unavoidable. Such a risk is also known as a market risk and is measured by the beta of a stock. The market beta is always 1. A stock having a beta higher than 1 has higher systematic risk than market and a stock having a lower beta than 1 has a lower systematic risk than the market.
As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.
Total risk, on the other hand, is the risk that comprises of both systematic and unsystematic risk. The systematic risk is the market risk as mentioned above while the unsystematic risk is the firm specific risk and is avoidable. The total risk is measured by the standard deviation or volatility of the stock. The stock with higher volatility has higher total risk and vice versa.
The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.
If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
<h3>What is a Contribution Margin?</h3>
The contribution margin can be expressed in gross income terms. After subtracting the variable element of the firm's expenditures, it indicates the extra money gained for each product sold.
The contribution margin is calculated by subtracting the selling price/unit from the variable cost/unit.
This metric displays how much a certain product adds to the company's total earnings. It displays the share of revenue that helps to pay the firm's fixed costs and gives one approach to illustrate the profit potential of a certain product supplied by a company.
Therefore, If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
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Answer:
The correct answer is False.
Explanation:
Commercial credit has its importance in that it is an intelligent use of short-term liabilities of the company to obtain resources in the least expensive way possible. For example, accounts payable constitute a form of commercial credit. They are the short-term credits that suppliers grant to the company. Among these specific types of accounts payable are the open account which allows the company to take possession of the merchandise and pay for them in a certain short term, the Commercial Acceptances, which are essentially checks payable to the supplier in the future, the Notes which is a formal recognition of the credit received, the Consignment in which no credit is granted and ownership of the goods never passes to the creditor to the company. Rather, the merchandise is sent to the company with the understanding that it will sell it for the benefit of the supplier, withdrawing only a small commission for the utility.
A long-term loan is usually a formal agreement to provide funds for more than one year and most are for some improvement that will benefit the company and increase profits. An example is the purchase of a new building that will increase capacity or machinery that will make the manufacturing process more efficient and less expensive. Long-term loans are usually paid from the profits. Mortgage: It is a conditional transfer of property that is granted by the borrower (debtor) to the lender (creditor) in order to guarantee the payment of the loan. Importance: It is important to note that a Mortgage is not an obligation to pay since the debtor is the one who grants the mortgage and the creditor is the one who receives it, in case the lender does not cancel said mortgage, it will be taken away and will be transferred to the borrower. It should be noted that the purpose of the mortgages by the lender is to obtain some fixed asset, while for the borrower it is to have security of payment through said mortgage as well as to obtain a profit from it through the interest generated. For the borrower it is profitable due to the possibility of obtaining a profit through the interest generated from said operation.
Answer: C and D
Explanation:
Depository institutions are financial organization in the US that is legally authorized to confirm money deposit from customers.
<u> 26.4 percent</u> the change in the money supply when the fed purchases $600 worth of bonds and the required reserve ratio is 8 percent assuming banks hold no excess reserves
<h3>What is
money supply?</h3>
The total amount of money and other liquid assets in an economy on the measurement date is known as the money supply. Both cash and deposits that can be accessed virtually as easily as cash are roughly included in the money supply.
Through a mix of their central banks and treasuries, governments issue coin and paper money. By imposing reserve holding requirements on banks, dictating how to grant credit, and handling other monetary issues, bank regulators have an impact on the amount of money that is available to the general people.
The quantity of money or cash in circulation within an economy is referred to as the money supply.
Numerous measurements of the money supply also factor in non-cash assets like credit and loans.
Monetarists contend that, all other things being equal, expanding the money supply results in inflation.
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