Answer: beg book value +the salvage value) / 2.
(the sum of annual average book values) ÷ asset’s life
(beg book value +the end book value) ÷ 2.
Explanation:
Depreciation is simply when an asset begin to wear and tear and thereby its value is reduced.Straight line depreciation is calculated when the difference between the cost of an asset and the expected salvage value is divided by the number of years it is projected to be used.
Using this method, the annual average investment can be calculated as:
• beg book value +the salvage value) / 2.
• (the sum of annual average book values) ÷ asset’s life
• (beg book value +the end book value) ÷ 2.
An investors primary goal is to make money. More specifically, money that is greater than the sum amount initially invested.
Answer:
D. harms the society by interfering with the economy's natural process.
Explanation:
In order to get out of recession, the fed should reduce the tax rates, which would in return lead to higher disposable income of the consumers, and then there will be an increase in the demand.
On the other hand the sale of bonds would even further increase the recession, as there will be more cash crunch in the economy. A decrease in reserve ratio will be a long time taking solution, so it would not provide an immediate solution.
MCQ
But, if the fed interferes with the short run equilibrium in the hope of giving short run benefits, it will hamper the economy's natural process to attain a new equilibrium as discussed in the paragraph above. Hence, option D is the correct answer
Option A and C are incorrect, because, employment is not much affected with lowering of income tax. On, the other hand, inflation levels rise, when there is a cut in income tax, as it gives more currency in the economy, hence even C is incorrect.
Answer:
The new portfolio beta is 1.31 rounded off to two decimal places.
Explanation:
The portfolio beta is a function of the sum of the weighted average betas of the individual stock's that form up the portfolio. The portfolio beta is calculated using the following formula,
Portfolio beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N
Where,
- w is the weightage of each stock in the portfolio
The beta of the portfolio when one stock with a beta of 1 is sold is,
The sum of individual stock betas for 19 stocks is = 20 * 1.31 - 1 * 1 = 25.2
The new portfolio beta when one stock with a beta of 0.97 is added is,
Portfolio beta = (25.2 + 0.97) / 20
Portfolio beta = 1.3085 rounded off to 1.31
