Answer:
C. A risk averse investor would choose the economy in which stock returns are independent because risk can be diversified away in a large portfolio.
Explanation:
if stock prices move together, (positive correlation), the volatility of the portfolio will be higher. Higher volatility means higher risk. This is the case with the first economy.
In the second economy however, the stocks are independent of each other meaning there is zero correlation between stocks and hence the portfolio volatility will be much lesser.
As a risk-averse investor you will prefer the portfolio with lower volatility for the same expected return.
Answer:
A. Gained value compared to the Italian lira because inflation was higher in Italy.
Explanation:
Answer:
Price-earning ratio is 28.57 .
Explanation:
Price earning is a ratio widely used by common stock holder in stock market. The ratio is used to measures share price in relation to earning per share. The ratio tells us years require to recover amount spend on acquisition of share.
Detail calculation is given below.
Sales $ 5,600 -A
Net profit $ 168 -B
EPS $ 0.042 -B/4000
Price-earning ratio = 1.2/EPS = 28.57
The question is incomplete and should state "Recent rains increase the demand for kayaks, as paddlers want to take advantage of the exciting river conditions on the Oconee river. New plastic technology makes kayaks less expensive to make, as a result, one should expect the equilibrium price of kayaks to purchased to fall and the equilibrium quantity of the kayaks to raise." The questions is also a true or false question. The answer will be false. It is false because both the equilibrium price will raise and so will the quantity. The increase in demand will will create a new curve in the demand which will raise the prices and the companies will make more kayaks.
