Answer:
The performance of John and the benchmark is not correct. since John's portfolio consists of high risk binds and small cap stocks, it is not seen as a good practice in making a portfolio of small cap stocks as a benchmark
Explanation:
Solution
From the given question, my opinion towards the performance of John's is that he's claim is wrong.
The benchmark portfolio should be a good approximation of the filed/sector of your portfolio. Since the John's portfolio comprises of small cap stocks and high-risk bonds, it is not a good standard practice to make a portfolio of small cap stocks as benchmark.
All of the following qualitative considerations may impact upon capital investment analysis except manufacturing sunk cost
.
Option c
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Explanation:
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In a manufacturing setup or any business environment Capital investment plays a major role. To do the long term investment and to assess the profitability the company will do a budgeting procedure is called the capital investment analysis.
The assessment of fixed assets like equipment, machines of a manufacturing sector is done by the capital investment analysis. From the above the manufacturing sunk cost is not considered for the analysis because it the money which has spent already that cannot be recovered.
1. Security of your funds
2. Fees..
3. Ease of deposit
Answer:
Option b) False
Explanation:
Capital structure
This is usually defined as a composition or the combination of debt and equity that are used to finance a firm.
Signaling theory
According to this theory, It states that actions are taken by a firm to send "signals" to shareholders. It states that firms that uses issue debt to raise funds are signaling or projecting that their future prospects are favorable.
In this theory, managers do have information about their firm's prospects than do outside investors. It is also referred to as an action taken by a firm's management that gives possible clues to investors about how management looks at the firm's capital prospects. It centers on the ability to borrow money at a reasonable cost when good investment opportunities comes their way.