The appropriate response is market analysis, it is a quantitative and subjective evaluation of a market. It investigates the measure of the market both in volume and in esteem, the different client portions and purchasing designs, the opposition, and the financial condition as far as hindrances to passage and control.
Answer:
Borrowers need capital in order to invest and start businesses. They can be both companies and individuals.
Savers on the other hand have capital and want to grow it so they need to find a way to get it to Borrowers who will then use it to invest.
This is where Financial institutions such as banks and mutual funds come in. They act as intermediaries and collect money from the savers and pool it together so that it becomes a significant amount. Borrowers then go to these institutions and present their plans to justify their need for capital.
If the plans are within an allowable risk threshold, they get the funds and then pay it back with interest as the business progresses thereby making money for both themselves and the savers.
Answer:
a. 75%
b. 1,702
c. 94%; 4,334
Explanation:
a. A town has seven burger shops. The market share of these burger shops are 23%, 22%, 18%, 12%, 11%, 8%, and 6%.
The four-firm concentration of the hamburger industry can be found by calculating the market share of the top four firms.
Four firm concentration ratio
= 23% + 22% + 18% + 12%
= 75%
b. The Herfindahl index can be found by squaring the market share of each firm and then summing them up.
Herfindahl index
= 529 + 484 + 324 + 144 + 121 + 64 + 36
= 1,702
c. If the top three sellers are combined to form a single firm, there market share will be
= 23% + 22% + 18%
= 63%
The new four firm concentration will be
= 63% + 12% + 11% + 8%
= 94%
The herfindahl index will be
= 3,969 + 144 + 121 + 64 + 36
= 4,334
Answer:
When a company sells different securities together (this usually happens during mergers and acquisitions):
- and the price of all the securities is not certain, the incremental method will first allocate proceeds to the sale of securities whose price is actually certain. The remaining proceeds will be allocated to the securities whose price is uncertain. E.g. total sales $10 million, stocks worth $5 million were sold and bonds worth ? million were sold. The company will allocate $5 million to stocks and $5 million to bonds.
- and the price of all the securities is certain, the proportional method allocates the sales proceeds proportionally among the different securities sold. E.g. total sales $10 million, stocks worth $5 million were sold and bonds worth $3 million were sold. The company will allocate ($5/$8) x $10 million = $6.25 million to stocks and $3.75 to bonds.
Answer:
d. Cash equivalent.
Explanation:
Based on the information provided within the question it can be said that the investment term being described are called cash equivalents. This is one of the three main asset classes within financial investing, with stocks and bonds. Like mentioned in the question it refers to to an investment securities as short term investments that are highly liquid. Such examples include commercial paper and treasury bills.