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3 years ago

Standard deviation and beta both measure risk, but they are different in that beta measures

Business

1 answer:

Firdavs [7]3 years ago

4 0

Answer:

b) only systematic risk, while standard deviation is a measure of total risk.

Explanation:

Standard deviation is measure of the total risks of an investment. It measures the volatility in return of an investment as a result of both systematic and non-systematic risks. Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company .

Beta on the hand measures of only systematic risk. Systematic risk is the deviation of return of an investment form the average market return due to economic-wide factors like inflation, interest rate, exchange rate e.t.c

b. only systematic risk, while standard deviation is a measure of total risk.

You might be interested in

Which rules and regulations govern advertising to protect the consumer from deceptive or misleading claims?

Fed [463]

Advertising regulations provide a set of rules and regulations that protects the consumer from deceptive or misleading claims.

Answer: Option (d)

Explanation:

Advertising regulations is a consumer protection act that safeguards the peoples from being misled in false information about sales and trade.

These regulations evaluates the bad products in a company and makes it fail easily.

It explains the detailed information about the severity of false product in a company and prevents the people from consuming that product.

FTC is one of the advertising policies commonly referred to as the Federal Trade Commission safeguards the consumers from unwanted practices and it also protects the basic rights of the consumer in a state.

FTC uses three major bureaus to evaluate the fraud practices involved in a business and implements a proper advertising activities.

Bureaus of Competition, Economy and Consumer protections implies the best practices of advertising policies.

7 0

3 years ago

Prime Company began operations in January, 2019, by issuing 5,700 shares of 9%, cumulative, $65 par value preferred stock and 25

8090 [49]

Answer:

Preference dividend = 9% x $65 x 5,700 shares

= $33,345

Dividend paid to ordinary shareholders = $50,000 - $33,345

= $16,655

Explanation:

The dividend paid to preferred stockholders is 9% of the par value multiplied by number of preferred stock outstanding. The dividend paid to common stockholders is the difference between total dividend paid and dividend paid to preferred stock holders.

6 0

3 years ago

Several years ago, Nicole Company issued bonds with a face value of $1,030,000 for $960,000. As a result of declining interest r

EleoNora [17]

Answer:

Journal Entry

Explanation:

The Journal Entry is shown below:-

Bonds payable Dr, $1,030,000

Loss on retirement of bond Dr, $78,800

($1,091,800 - $1,013,000)

To discount on bond $17,000

To cash $1,091,800

($1,030,000 × 106%)

(Being retirement of the bonds is recorded)

8 0

3 years ago

Highway 55 Studios has budgeted the following amounts for its next fiscal year: Total fixed expenses $ 1 comma 980 comma 000 Se

faust18 [17]

Answer:

Contribution per unit = Selling price - Unit variable cost

= $70 - $10 = $60

Break-even sales in units = Fixed cost

Contribution per unit

= $1,980,000

$60

= 33,000 units

If fixed cost reduced by $49,500, new fixed cost will be $1.930,500

33,000 = $1,930,500

$70 - VC

33,000(70 - VC) = $1,930,500

2,310,000 - 33,000VC = $1,930,500

2,310,000 - $1,930,500 = 33,000VC

379,500 = 33,000VC

379,500 = VC

33,000

VC = $11.50

Increase in variable expenses per unit

= $11.50 - $10 = $1.50

Explanation:

In this case, we need to determine the break-even point in units, which is fixed cost divided by variable expenses per unit. If total fixed expenses reduced by $49,500, the new total fixed expenses will be $1,930,500. Then, we will equate the break-even point in units to the new fixed cost divided by contribution per unit, which is selling price minus variable expenses per unit. Since break-even point in units, new fixed cost and selling price were known with the exception of variable cost, variable cost becomes the subject of the formula. The old variable expenses will be deducted from the new variable expenses so as to obtain increase in variable expenses per unit.

7 0

4 years ago

Manny and Irene will be retiring in fifteen years and would like to buy a Mexican villa. The villa costs $500,000 today, and ho

ki77a [65]

Answer:

Annual deposit= $37,714.37

Explanation:

Giving the following information:

The villa costs $500,000 today, and housing prices in Mexico are expected to increase by 6% per year. Manny and Irene want to make fifteen equal annual payments into an account, starting today, so there will be enough money to purchase the villa in fifteen years.

The account earns 10% per year.

First, we need to calculate the final value of the house with the following formula.

FV= PV*(1+i)^n

FV= 500,000*(1.06^15)=$1,198,279.1

Now, we can calculate the annual payments required:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (1,198,279.1*0.10)/[(1.10^15)-1]

A= $37,714.37

6 0

4 years ago