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4 years ago

What type of risk is eliminated through diversification?

Business

2 answers:

Helen [10]4 years ago

7 0

Answer:

Unsystematic risk

Explanation:

This risk is inherent in a specific company or industry. Then diversification helps to avoid this risks as investments are made in different companies and industries.

Annette [7]4 years ago

3 0

The risk that diversification helps us overcome is known as an unsystematic risk.

Explanation:

As the name suggests, it means a situation of a company being affected by a risk that doesn’t exist in other industries. It only takes place in a specific industry. Diversification is taken up to reduce this risk; the companies invest in various sectors rather than sticking to one specific sector.

It also involves allocating various financial instruments for investments. Diversification targets the returns and helps in improving it as the company invests in various categories that perform differently and differ in reactions too.

You might be interested in

Which TWO of the following statements are TRUE when a broker-dealer executes a principal transaction?

tigry1 [53]

Answer:

C) II and III

Act as a dealer
Charge a mark-up or a mark-down

Explanation:

Dealers can purchase and sell securities on their own accounts, this is called position trading. When they carry on this type of transactions, they charge markups instead of commissions.

Brokers act like agents, and they can only arrange a transaction between clients and they charge a commission for their work.

6 0

3 years ago

On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,100 units of Comfort Office Keyboard to one of its clients

Harrizon [31]

Answer:

Journal Entry

Explanation:

1. There are two obligations in this contract

a. keyboard

b. Customer option for future discount

2. Cash Dr, $69,700

To Deferred revenue - keyboard $66,215

To Deferred revenue - discount coupon $3,485

(Being cash is recorded)

Working note:-

Keyboards = 4,100 × $19

= $77,900

Option = $41,000 × (0.25 - 0.05) × 0.50

= $4,100

Allocation

For keyboard

= $77,900 ÷ ($77,900 + 4,100)

= 0.95

Deferred revenue Keyboard = $69,700 × 0.95

= $66,215

Option = 4,100 ÷ ($77,900 + 4,100)

= 0.05

Deferred revenue - discount coupon = $69,700 × 0.05

= $3,485

3. Cash Dr, $69,700

To Deferred revenue Keyboard $69,700

(Being cash is recorded)

4 0

4 years ago

You want to start a business that you believe can produce cash flows of $44,000, $61,000, and $80,000 at the end of each of the

madam [21]

The present worth of this business it has been calculated is given as $302,898.

How to solve for the worth of the business

In the first year

Cash flow = 44000

PVF at 9.7% = 0.91158

The present value = 0.91158 * 44000

= $40106

In the second year

Cash flow = $61,000,

PVF at 9.7% = 0.83097

The present value = $50689.17

In the third year

Cash flow = $80,000

PVF at 9.7% = 0.7575

The present value = $60600

In the 4th year

Cash flow = $200,000

PVF at 9.7% = 0.7575

The present value = $151,500

The worth of the business today is going to be the sum of all the present values

= $151,500 + $60600 + $40106.52 + $50689.17

= $302,898

Read more on present value here: brainly.com/question/20813161

#SPJ1

5 0

2 years ago

The Bureau of Labor Statistics produces data on unemployment based on the number of people collecting unemployment insurance. a.

Ira Lisetskai [31]

Answer:

FALSE

Explanation:

A person is considered unemployed if he / she does not have a job and has searched for a job within the last 4 weeks

Unemployment rate = (number of unemployed / labour force) x 100

To collect data on unemployment, The Bureau of Labor Statistics conducts a survey every month known as the Current Population Survey (CPS).

types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.

The geologist lost his hob permanently due to increase in wages (polices)

Frictional unemployment: the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom

6 0

3 years ago

On October 1, 2018, Chief Corporation declared and issued a 10% stock dividend. Before this date, Chief had 80,000 shares of $5

iris [78.8K]

Answer:

correct option is a. decrease by $80,000

Explanation:

given data

stock dividend = 10%

common stock = $5

Chief = 80,000 shares

market value = $10

to find out

Chief's retained earnings will

solution

here retaining earning will be decrease by the maount of stock dividend that is

retaining earning = $80,000 × 10 % × $10

retaining earning = $80,000 × 0.10 × $10

retaining earning = $80000

so here correct option is a. decrease by $80,000

4 0

3 years ago