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AveGali [126]
2 years ago
14

You are a​ risk-averse investor who is considering investing in one of two economies. The expected return and volatility of all

stocks in both economies is the same. In the first​ economy, all stocks move together long - in good times all prices rise​ together, and in bad times they all fall together. In the second​ economy, stock returns are independent long - one stock increasing in price has no effect on the prices of other stocks. Which economy would you choose to invest​ in? Explain.
​(Select the best choice​ below.)A. A risk averse investor would choose the economy in which stocks move together because the uncertainty is much more​predictable, and you have to predict only one thing.B. A risk averse investor would prefer the economy in which stock returns are independent because by combining the stocks into a portfolio he or she can get a higher expected return than in the economy in which all stocks move together.C. A risk averse investor would choose the economy in which stock returns are independent because risk can be diversified away in a large portfolio.D. A risk averse investor is indifferent in both cases because he or she faces unpredictable risk.
Business
1 answer:
Aleks [24]2 years ago
7 0

Answer:

C. A risk averse investor would choose the economy in which stock returns are independent because risk can be diversified away in a large portfolio.

Explanation:

if stock prices move together, (positive correlation), the volatility of the portfolio will be higher. Higher volatility means higher risk. This is the case with the first economy.

In the second economy however, the stocks are independent of each other meaning there is zero correlation between stocks and hence the portfolio volatility will be much lesser.

As a risk-averse investor you will prefer the portfolio with lower volatility for the same expected return.

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alekssr [168]

Answer:

Challenger Factory

The total factory overhead that Challenger Factory will allocate to regular widget production if budgeted production is 75,000 units and actual production for the period is 127,500 units would be:

= $795,600.

Explanation:

a) Data and Calculations:

Total budgeted factory overhead = $589,600

Total estimated direct labor hours = 376,800

Overhead rate = $589,600/376,800 = $1.56

Direct labor hours per unit of widget = 4 hours

Budgeted production of regular widgets for the period = 75,000 units

Total direct labor hours for the period = 75,000 * 4 = 300,000 hours

Actual production of regular widgets for the period = 127,500

Total direct labor hours for regular widgets = 510,000 (127,500 *4)

Total factory overhead that Challenger Factory will allocate to regular widget production if budgeted production is 75,000 units and actual production for the period is 127,500 units would be:

= 510,000 * $1.56 = $795,600

3 0
2 years ago
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vesna_86 [32]

Answer:

Option d is the correct option.

Explanation:

All other options creates less awareness and uniqueness of the products, whereas emphasising on better quality of products creates brand recognition and this higher brand recognition creates greater brand loyalty.

For creation of brand loyalty, we have to offer our customers something extra that our competitors are unable to deliver.

7 0
3 years ago
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liberstina [14]

The law suit that The customers are going to give here is based on the product liability.

<h3>What is a product liability?</h3>

This is a suit that is made against a company due to the fact that they allowed a defective good to be bought by a consumer.

The company is being sued due to the fact that the customers are injured fron the defective bicycle.

Read more on product liability here: brainly.com/question/25754997

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2 years ago
The gas station on the edge of town has gas that is 30c/gallon cheaper than my local station. I buy 10 gallons of gas a week. As
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Answer:

No

Explanation:

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I’m tired of being broke! Help
Dennis_Churaev [7]

Answer:

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Explanation:

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