1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
iren2701 [21]
3 years ago
12

Barney wants to start a new business that yields a profit of​ 20% per year after a period of 2 years. In this​ period, if he

invests in the stock market​ instead, he could gain a compounded earning of​ 25%. Investing in stocks depicts his ________.
Business
1 answer:
crimeas [40]3 years ago
5 0

Answer:

Opportunity costs.

Explanation:

Investing in stocks depicts Barney's opportunity cost of money.

The opportunity cost is the money or funds held up by an individual instead of investing it in other businesses or ventures to yield interests.

You might be interested in
Helpp please 10 points!<br><br> 2. What are Internal and external factors.
Sindrei [870]
Hope that helps! If you look it up it's all online!

4 0
3 years ago
The concept of risk and return is subjective for different people, as well as for corporations.
Juli2301 [7.4K]

Answer:

Risk and Return

1. Joe is an average investor. His financial advisor gave him options of investing in stock A, with a σ of 12%, and stock B, with a σ of 9%. Both stocks have the same expected return of 16%. Joe can pick only one stock and decides to invest in stock B.

Good Financial Decision?

Yes

No

2. Marcie works for an educational technology firm that recently launched its employee stock option plan (ESOP). Marcie allocated all her investments in the ESOP.

Good Financial Decision?

Yes

No

3. rin wants to invest in a hedge fund that has had a very strong performance track record. The hedge fund has given its investors a return of over 60% for the past five years. Although Erin is tempted to put her money in the fund, she decides to conduct due diligence on the hedge fund’s assets, because she is aware that past performance is no guarantee of future results.

Good Financial Decision?

Yes

No

Explanation:

1. Joe's decision to invest in stock B is a good financial decision.  Since both investments have the same returns, the decision on which investment to take shifts to the standard deviation of the returns, which specifies the variability of the returns.  Invariably, the investment with less standard deviation should win the vote.  Therefore, Joe's decision is a good financial decision because investment in B has a standard deviation of 9% unlike A's 12%.

2. Putting all eggs in one market as Marcie had done by allocating all her investments in the ESOP is not a good financial decision, theoretically.  It is always best to spread the risks, though higher-yielding investments (returns) bear higher risks.

3. The decision of Erin to conduct due diligence on the hedge fund's assets, despite its past performance is a good financial decision.  Due diligence reveals some behind-the-scene information that are instrumental in making sound business decisions.  Who are the present managers of the fund?  What systems are in place in the entity to guarantee similar future performance, all things being equal?  What market's sentiments and information are available for consideration?  These questions, and many others can be answered through a due diligence.  Surely, "past performance is no guarantee of future results."

3 0
3 years ago
True or false: Many companies are discontinuing defined-benefit plans and moving toward defined-contribution plans, which shifts
julsineya [31]

Answer:

False

Explanation:

A defined benefit pension plan is a type of pension plan where the employer gives a promise with respect to the particular pension payment that could be lumpsum for the retirement basis

Since in the question it is mentioned that the companies would not continue with the defined benefit plan and they move to the defined-contribution plans that save for the retirement so that it would create the more responsibility over the company due to this they would provide the retirement benefit but this statement is false as it is better to received the lumpsum amount

5 0
3 years ago
Claire is on her way to her job at a call center where she was planning on spending three hours. She can drop in and work any ho
denis23 [38]

Answer:

It should be greater than $36

Explanation:

The opportunity cost of working is the amount of money sacrificed or could have earned if the individual was not working. In this case, Claire has decided to go with her friend which means that the opportunity cost of not working is less than the benefits receives from going out. Because she is not working it means that the opportunity cost of working is more than 36 dollars, which is the income she could have earned in 3 hours.

7 0
3 years ago
Read 2 more answers
As a result of the tax, the price received by producers , and . as a result of the tax, the price paid by consumers , and total
exis [7]

This is false because consumer surplus declines because of the increase in price and reduction in quantity.

7 0
3 years ago
Other questions:
  • when management directs attention only to those activities not proceeding according to plan, they are engaging in
    15·1 answer
  • Select all that apply. personal values for working include: feelings of accomplishment pride in effort global economy satisfacti
    6·2 answers
  • The manager of a clothing store in the mall has hired five new employees for the summer. All of them have just graduated from hi
    11·2 answers
  • Pete is trying to get a loan. He has a credit score of 480. How is Pete’s lender likely to view this credit score?
    6·2 answers
  • Nonprice rationing devices are required
    12·1 answer
  • A downhill ski area is experiencing a decline in the number of lift tickets sold, falling revenues, and inadequate profits. The
    5·1 answer
  • Which of the following are research and development activities?
    11·1 answer
  • May 24 Sold merchandise on account to Old Town Cafe $18,450. The cost of goods sold was $11,000. Sept. 30 Received $6,000 from O
    10·1 answer
  • How has globalization made countries more independent
    14·2 answers
  • Norton loans a customer $500 on January 1. On July 1 of the same year, the customer must repay Norton $525. The amount of intere
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!