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3 years ago

List and explain five different asset classes. What are some reasons individuals would invest in these types of asset classes?

Business

1 answer:

hodyreva [135]3 years ago

4 0

Five different assets classes are:

1. Shares

A company’s capital is divided into shares. Each share forms a unit of ownership in a company. Shares can be classified as equity shares or preferences shares.

2. Bonds

A contract where a person borrows money, from a company or government for a period of time in return of interest payments. There are two types of bond coupon bonds and zero coupon bonds

3. Property

A person, government or a company acquiring a piece of land. Whether it be commercial or residential possession.

4. Commodities

Are a part of our everyday lives, Traditional commodities are raw materials that are further processed. Commodities like, cotton in form of shirts whilst we eat oats and cereal in breakfast are also commodities. You can invest directly in commodities or trade them.

5. Cash

Includes currency coins, hard cash, and the amount of cash deposited in the banks either in current account or savings account.

Individuals would invest in equity and bonds is because they want to enhance their returns and to smooth out any volatility in their portfolio. Investment in property, can be done to increase their return on investment over a period of time

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At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop w

kykrilka [37]

Answer:

a. 2.20

Explanation:

The computation of the price elasticity of supply is shown below;

Here,

P1 = $1 Q1 = 100

P2 = $1.20 Q2 = 150

We know that

Price elasticity = percentage change in quantity supplied ÷ percentage change in price

where

Percentage change in quantity supplied = (Q2-Q1)÷(Q2+Q1) ÷ 2)×100

= (150-100) ÷(150+100) ÷ 2)×100

= 40

And,

Percentage change in price is

= (P2-P1) ÷ (P2+P1) ÷ 2)×100

= ($1.20 - $1) ÷ ($1.20 + $1) ÷ 2)×100

= 18.1818

So, price elasticity of supply is

= 40 ÷ 18.1818

= 2.20

5 0

3 years ago

Read 2 more answers

A four-month European call option on a dividend-paying stock is currently selling for $5. The stock price is $64, the strike pri

timurjin [86]

The PV gain is 0.56 for an arbitrageur.

<u>Explanation</u>:

PV of the strike price is 60e-(12 $\times$ 4/12) = $57.65

PV of dividend is 0.80e-(12 $\times$ 1/12) = $0.79

where 5 < 64 - 57.65 - 0.79

The arbitrageur should buy the option and short stock, this above condition is missing in 10.8 condition.

The arbitrageur ought to contribute $ 0.79 of this at 12% for one month to deliver a profit of $0.80 in one month and the remaining $ 58.21 is put resources into four months in 12%, without considering the benefit that figures it out.

If the stock price declines below $ 60 of every four months, the arbitrageur loses $ 5 spent on the choice however gains on an extremely short position, the arbitrageur shorts when the stock price is in $ 64 and deliver profit with PV of $ 0.79 and closes the short position when the stock price is $ 60 or less because $ 57.65 is the PV of $ 60 the short position generates at least 64-57.65-0.79 = 5.56

The PV gain at least 5.56-5.00

0.56

If the stock price is above $60 at option when exercised and arbitrageur buys stock for $60 for four months and closes the short option. The PV of 60 is $57.65 and the dividend is 0.79 and gain in a short position and exercise the short option it results in 64-57.65-0.79= 5.56 and gains on PV is 5.56-5.0 = 0.56

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4 years ago

The senior management team at a book publishing company has asked you, their director of learning and development, to attend the

Cloud [144]

Answer:

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3 years ago

For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level,

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Answer:

c.the expected future returns must be equal to the required return.

Explanation:

When the stock is at equilibrium than the intrinsic value of the stock is equivalent to the market price of the stock that depicts that the expected returns which held in the future should be equivalent to the required return

Therefore the option c is correct

And, the other options that are mentioned in the question are incorrect

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4 years ago

The Carlberg Company has two manufacturing departments, assembly and painting. The assembly department started 12,400 units duri

Anna007 [38]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.

Download xlsx

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3 years ago