Answer:
It's best to invest in the second economy
Explanation:
The question does not provide information on the hypothetical economic expectations of the two economies, but as a risk-averse investor, it's a better idea to try to "spread" the risk instead of concentrating it.
In the first economy, conditions might or might not be good. If they are good, returns will be extraordinary because all stocks will provide good returns, but if conditions take a turn for the worse, all stocks prices will fall and the financial consequences will be catastrophic.
In the second economy, results might never be as good as in the first economy, but they also will not ever be as bad. The risk is spread between various stocks, and while some may fall in price, others will rise, and viceversa. For a risk-adverse investor, this a far better option.
Answer:
0.68
Explanation:
A portfolio consists of an investment of $7,500
The amount of common stock is 20
The portfolio beta is 0.65
Suppose one of the stock in the portfolio is sold with a beta of 1.0 for $7,500
The proceeds realized is then used to purchase another stock with a beta of 1.50
The first step is the to calculate the change in beta
Change in beta= 1.50-1
= 0.5
The next step is to divide the change in beta by the number of common stock
= 0.5/20
= 0.025
Therefore, the new beta can be calculated as follows
= 0.65+0.025
= 0.68
Hence the new portfolio's beta is 0.68
Answer:
an increase in equilibrium price and an indeterminate effect on equilibrium quantity.
Explanation:
An inferior good is a good whose demand increases when income falls and reduces when income rises.
If ramen is an inferior good, when income falls its demand would increase. This would lead to a rise in quantity and price.
An increase in the price of wheat would increase the cost of production of ramen. As a result, the supply of ramen would fall. Price would increase and supply would fall.
The combined effect would be an increase in equilibrium price but an indeterminate effect on equilibrium quantity.
I hope my answer helps you
Answer:
C. Professional Ethics.
Explanation:
Ethics are moral qualities which governs a persons behavior. A person is sometimes in an ethical dilemma scenario where he has to take decision which might impact his ethical values. Professional ethics is a situation where a person thinks how his decision will be viewed by an independent jury or audience.
Answer:
a. the call price would decrease.
Explanation:
it is important you note that a company pays dividend (share of profit) to shareholders sometimes with a motive of attracting new investors.
Thus, we may likely expect the call price to decrease as a result of the sudden announcement.
