Answer:
The correct answer is True.
Explanation:
Financial leverage is the use of debt to acquire assets that generate more assets. It is a concept used in operations where the investment that is made is greater than the money that is actually available, so that with a lower amount of money a greater possibility of profit or loss can be achieved. Therefore, it implies a higher risk.
The main instrument for leverage is debt, which allows you to invest more money than is available thanks to what has been borrowed. But you can also achieve financial leverage through many other financial instruments, such as derivatives, futures or CFDs.
We can find three types of financial leverage:
- Positive leverage: this type of leverage occurs when the economic profitability (return obtained from assets) that occurs with the leverage operation is higher than the cost of the debt, that is, generally at the interest rate paid at bank for the loan.
- Neutral leverage: occurs when the economic return is equal to the interest rate paid on the loan. Employment or increased indebtedness does not cause variation in economic profitability.
- Negative leverage: it occurs when the economic profitability is lower than the interest rate that is being paid for the debt or for the funds obtained in the loans. In this case, obtaining the debt is unproductive.
Answer:
used as a benchmark for some industry leverage
Explanation:
Standard and Poor's 500, sometimes known as S&P 500 is an index for stock market which measures the stock performance of five hundred large organizations that is listed in the stock exchanges of the United States. It is founded in the year 1957.
The S&P lists a group of 500 organizations whose daily average share prices are use to calculate the the index a day's security prices. It is used to benchmark the organization.
Answer:
A. Image advertising
Explanation:
Image advertising is an attempt to create a favorable mental picture of a product or firm in mind of consumers. This image aims to associate the advertised product and/or firm with certain lifestyles or values.
Answer:
$0.10 and $0.02. is correct answer
Explanation:
Given:
Elasticity = - 5
Demand = -1.25
Computation:
-e = p / [p-mc]
5 = p / [p-0.02]
5p - 0.1 = p
p = 0.025
for new senior citizen;
1.25 = p / [p-0.02]
p = 0.1
So,
$0.10 and $0.02. is correct answer
This term shows how responsive the quantity of demand for a product will be when you change the price. People will not always purchase your product if the price is too high.
