Answer: The presence of asymmetric information
Explanation: In simple words, asymmetric information refers to the situation when one party to a contract have extra information regarding a subject than the other party of the contract.
Asymmetric information creates the potential of misconduct from the leading party as they can easily cheat the other party by concealing that important information.
In the given case, Mr. Smith was aware that his laptop is not working properly but still he sold its to a customer who was not aware of it. Thus, we can conclude that the correct option is C.
It is true that the administrative and political decision making procedures and intuition have been associated with high performance in unstable environment where decision must be rapidly taken.
<u>Explanation:</u>
In the cases of unstable environment in the businesses, certain decisions need to be take in a quick manner which might result in the changing in the business procedures. This has a direct effect on the stabilizing the environment of the business.
These decisions might be administrative in nature where the best alternative for the business procedure will be selected or political in nature where policies are changed to stabilize the environment.
Answer:
recruitment is the correct answer.
Explanation:
- Recruitment is a process of hiring and selecting the right and qualified person for a vacant position.
- The recruitment process involves selecting a required candidate, sourcing attracting, investigating the job qualifications, screening, analyzing the application, strategy development, evaluation and shortlisting.
- The advantages of the Recruitment process are increased applicant quality, increase manager satisfaction and improve employment name.
Answer:
Alpha for A is 1.40%; Alpha for B is -0.2%.
Explanation:
First, we use the CAPM to calculate the required returns of the two portfolios A and B given the risks of the two portfolios( beta), the risk-free return rate ( T-bill rate) and the Market return rate (S&P 500) are given.
Required Return for A: Risk-free return rate + Beta for A x ( Market return rate - Risk-free return rate) = 5% + 0.7 x (13% - 5%) = 10.6%;
Required Return for A: Risk-free return rate + Beta for B x ( Market return rate - Risk-free return rate) = 5% + 1.4 x (13% - 5%) = 16.2%;
Second, we compute the alphas for the two portfolios:
Portfolio A: Expected return of A - Required return of A = 12% - 10.6% = 1.4%;
Portfolio B: Expected return of B - Required return of B = 16% - 16.2% = -0.2%.
