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mars1129 [50]
3 years ago
9

Fundamental analysis determines that the price of a firm's stock is too low, given its intrinsic value. The information used in

the analysis is available to all market participants, yet the price does not seem to react. The stock does not trade on a major exchange. What concept might explain the ability to produce excess returns on this stock?A. January effectB. Neglected-firm effectC. P/E effectD. Reversal effect
Business
1 answer:
Allisa [31]3 years ago
8 0

Answer:

The correct answer is letter "B": Neglected-firm effect.

Explanation:

The Neglected-firm effect has the purpose to explain why small companies that are not well-known have better performances than the ones that are. The theory explains that smaller companies' stocks generate higher returns because they are unlikely to be studied by market analysis. In that sense, because no much information is provided by the smaller firms -even lesser than what is required by law, they are <em>neglected </em>by analysts since there are very few data to take a look at.

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Stock A has an expected return of 14% and a standard deviation of 35%. Stock B has an expected return of 20% and a standard devi
Fiesta28 [93]

Answer:

The expected return from a portfolio consisting of 25% of stock A and 75% of stock B is 18.5%

Explanation:

Return on portfolio=Return of security A *Weight of security A+Return of security B *Weight of security B  

Return of security A=14%

Return of security B=20%

Weight of security A=25%

Weight of security B=75%

Return on portfolio  =  14 % ∗  25 /100  +  20%  ∗  75 /100

Return on portfolio  =  <u>18.5 %</u>

6 0
3 years ago
What economic concept is applied in this statement?
VMariaS [17]
Positive externality

8 0
3 years ago
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Equipment originally costing $100,000 has accumulated depreciation of $65,000. if it is sold for $40,000, the company should rec
son4ous [18]
Hi there
What we need first is the book value of the equipment
The book value is
originally costing - accumulated depreciation
100,000−65,000=35,000

Since the sale price is 40000 and the book value is 35000 This result a gain of 5000 (40000-35000)

Good luck!

4 0
3 years ago
Which of these statements about a franchisee is true?
yawa3891 [41]
OD they are able to use a franchiser proven
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Which education choice would be the right one to get Mario started in his career working with cars?
lozanna [386]

Answer:

C) a two-year vocational school program in automotive repair

Explanation:

From the answers provided within the question it can be said that the best educational choice would be a two-year vocational school program in automotive repair. This program will teach Mario everything he needs to know about automotive repair including how to diagnose each problem and figure out how to solve them. The program will also prepare him with actual vehicle repair hands-on training.

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