The following statement about diversification is TRUE
A.Diversification is an investment strategy where you invest all your money in one industry.
Explanation:
- A diversified investment is a portfolio of various assets that earns the highest return for the least risk.
- A typical diversified portfolio has a mixture of stocks, fixed income, and commodities.
- It lowers overall risk because, no matter what the economy does, some asset classes will benefit
- Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories.
- It aims to maximize returns by investing in different areas that would each react differently to the same event
- The three types of diversification strategies include the concentric, horizontal and conglomerate.
- Diversification is a method of risk management that involves the change and implementation of different investments stated in a specific portfolio.
Answer:
8.3 times
43.8 days
Explanation:
Accounts receivable turnover measure the average times the company received their receivable, It measure the efficiency of the company regarding collection from customers. Turnover will be higher if company has low ratio of receivables to sales value.
Average Receivable can be calculated as below
Average Receivable = (Accounts Receivable at the beginning of the year + Accounts Receivable at the end of the year) / 2 = ($50,000 + $70,000)/2 = $60,000
Net Sales = $500,000
Formula for Accounts receivable turnover is as follow
Accounts receivable turnover = Net Sales / Average Receivable
Accounts receivable turnover = $500,000 / $60,000 = 8.3 times
Days Sales Receivable is also know as Days receivables. It is an method of estimation of a company for the receivables value. it measure the numbers of days at average account receivable take after sales to convert into cash.
Formula for Days Sales Receivable is as follow
Days Sales Receivable = ( $60,000 / $500,000 ) x 365 = 43.8 days
Answer:
d. $102,250.
Explanation:
The computation of the selling price is shown below:
= Bond face value × quoted price
= $100,000 × 1.0225
= $102,250
To determine the selling price we multiplied the bond face value with the quoted price so that the accurate selling price can come.
We simply fraction the quoted price and then divide it by 100
In mathematically,
= 409 ÷ 4
= 102.25 ÷ 100
= 1.0225
Answer:
C. The insurer will deny J's request to add more insurance.
Explanation:
The Guaranteed Insurability Rider means extra policy which is an addition to insurance rider policy and allows the purchaser of the policy to purchase extra life insurance on the life of the insured at prearranged periods of time.
Usually, this ability to purchase extra life insurance ends at the age of 40 and since the J has just celebrated the 42nd birthday, therefore he will not be eligible to buy more death benefit.
Based on the above discussion, the answer shall be C. The insurer will deny J's request to add more insurance.
