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fenix001 [56]
2 years ago
8

why might a mutual fund be a better investment than individual stock and bonds a mutual fund guarantees dividends be stocks are

more expensive see risk is Diversified with a mutual fund D bonds carry last frizz-ease stockholders can pick the stocks for their mutual fund​
Business
1 answer:
borishaifa [10]2 years ago
7 0

Answer:

The correct answer would be option C, The risk is diversified with a mutual Fund.

Explanation:

Mutual funds is a pool of funds from different people. This pool of fund is invested in different securities. These securities can be stocks, bonds, treasury bills, etc. In this way the risk is diversified. When you invest money with the money of other people, the pool of money or funds will minimize the risk associated with investing a single person's money in any security. Secondly, the mutual funds are managed by professionals who are expert in the field of managing funds. They better know when and how much funds to liquidate and at what time.

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4.The inflation rate in the U.S. is 3%, while the inflation rate in Japan is 1.5%. The current exchange rate is $1 equal to 105
Nana76 [90]

Answer:

103.4709          

Explanation:

The computation is shown below:

Given that

U.S inflation rate = 3%

Japan inflation rate = 1.5%

Current exchange rate = 105

Now the new exchange rate for the yen is

= Current exchange rate × (1 + Japan inflation rate) ÷ (1 + U.S inflation rate)

= 105 × (1 + 1.5%) ÷ (1 + 3%)

= 105 × (1.015 ÷ 1.03)

= 105 × 0.985436893

= 103.4709          

5 0
3 years ago
A common stock pays an annual dividend per share of $1.80. The risk-free rate is 5%, and the risk premium for this stock is 4%.
ArbitrLikvidat [17]

Answer:

The value of the stock today is $20

Explanation:

Using the CAPM equation, we first calculate the required rate of retunr on the stock.

The equation for CAPM is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market
  • Beta * rpM is the risk premium on stock

r = 0.05 + 0.04

r = 0.09 or 9%

The value of the stock can be calculated using the zero growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock. As the dividend from the stock is expected to remain constant through out to an indefinite period, the value of the stock today is,

P0 = Dividend / r

P0 = 1.8 / 0.09

P0 = $20

3 0
2 years ago
If a department that applies process costing starts the reporting period with 40,000 physical units that were 80% complete with
andriy [413]

Answer:

True

Explanation:

<em>Equivalent units are notional whole units which represent incomplete work and are used to apportion cost between work progress and completed work. These units are determined as follows: </em>

Equivalent units = Degree of work done(%) × units of inventory

Equivalent units

<em>Direct material:</em>

Balance of work = 100-80 = 20%

Equivalent of work to be added = 20% × 40,000 = 8,000

<em>Labour</em>

Balance of work = 100-50= 50%

Equivalent of work to be added =50% × 40,000 = 20,000 units

                                    <em>Equivalent of work to be added(units)</em>

Material                               8000                                  

Labour                               20,000

8 0
2 years ago
When a person whose duty is conditional leads the other party to rely on his noninsistence on the condition, the condition will
Tems11 [23]
The condition will be excused because of ESTOPPEL. Estoppel is an obstruction which prevents a person from asserting a right or denying a fact. The obstruction is normally due to the person action, conduct or failure to act. The principal aim of estoppel is to prevent injustice due to inconsistency or fraud. Estoppel is of two types: equitable and legal estoppel. 
3 0
2 years ago
A project has an initial cost of $44,000. Expected cash flows as a result of this project are projected as indicated below. Calc
maksim [4K]

Answer:

It will take 5 years and 99 days to recover for the initial investment at a discount rate of 9%.

Explanation:

Giving the following information:

Project X t Cash Flows

0 -44,000

1 10,000

2 10,000

3 15,000

4 18,000

5 15,000

<u>The payback period is the time required to cover for the initial investment. We need to discount each cash flow using the following formula:</u>

PV= Cf/(1+i)^n

Year 1= 10,000/1.09= 9,174.31 - 44,000= -34,825.69

Year 2= 10,000/1.09^2= 8,416.80 - 34,825.69= -26,408.89

Year 3= 15,000/1.09^3= 11,582.75 - 26,408.89= 14,826.14

Year 4= 18,000/1.09^4= 12,751.65 - 14,826.14= - 2,074.49

Year 5= 15,000/1.09^5= 9,748.97 - 2,074.49= 7,674.48

<u>To be more accurate:</u>

(2,074.49/7,674.48)*365= 99

It will take 5 years and 99 days to recover for the initial investment at a discount rate of 9%.

8 0
3 years ago
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