Answer:
C.Prepaid Insurance
Explanation:
Prepaid Insurance is the insurance amount paid in advance, so that company has a receivable because amount is not due yet. It will charged to expense account with the passage of time. Notes Payable, Unearned Revenue, Owner Withdrawals are classified as liabilities and capital contra accounts. So correct option is C. Prepaid Insurance.
Answer: duration of the portfolio
Explanation:
An investment time horizon which is also referred to as the investment horizon is total time that an investor is expected to hold a particular security.
In the context of a bond portfolio, price risk and reinvestment rate risk exactly cancel out at a time horizon equal to duration of the portfolio.
Answer:
B) $90,000
Explanation:
The market value of the unlevered equity can be calculated using the following formula:
Expected value = Σpx
Where:
p = the probability of each outcome
=50% in this case for both weak and strong economy.
x = the present value of cash flow for each outcome which is $90,000 in case of weak economy and $117,000 in case of strong economy.
Expected value= 0.50(90,000(1+15%)^-1)+0.50(117,000(1+15%)^-1)
=0.50(78,260.87)+0.50(101,739.13)
=$90,000
So the answer is B) $90,000
To answer this item, we assume that the interest rate is simple, such that the yearly rate was only divided by 12 months in order to determine the rate per month. Hence, to answer this item, we simply have to multiply the given percent by 12.
rate of interest/year = (12)(0.85%) = 10.2%
Therefore, the answer is 10.2%.
The probability that he will call A is 1 out of 2 because A and B have the same percent of Hazard. The probability that he will call C is 0/3 because it is more hazardous than the rest.
