Answer:
d. changes in the prices of stocks are not predictable. Evidence shows that indexed funds typically do better than managed funds.
Explanation:
"The efficient market hypothesis was developed from a Ph.D. dissertation by economist Eugene Fama in the 1960s, and essentially says that at any given time, stock prices reflect all available information and trade at exactly their fair value at all times. Therefore, it is impossible to consistently choose stocks that will beat the returns of the overall stock market. Basically, the hypothesis implies that the pursuit of market-beating performance is more about chance than it is about researching and selecting the right stocks."
Evidence about indexed funds vs. managed funds:
While actively managed funds may perform well in the short-term, index funds have higher returns over longer periods of time. This is because the index fund, a type of mutual fund or exchange-traded fund (ETF), is designed to follow predetermined guidelines in order to track a specific underlying set of investments, and is therefore passively managed."
References:
Staff, Motley Fool. “What Is the Efficient Market Hypothesis?” The Motley Fool, The Motley Fool, 21 June 2016
Thune, Kent. “Why Index Funds Beat Actively Managed Funds.” The Balance, The Balance, 3 July 2019
it expanded in cotton sales, if that's the time period u are speaking of...
Answer:
Current year’s increase in the PBO that is associated to service is $14,752
Explanation:
Projected Benefit Obligation is the present value of retirement benefit that an employee gets.
PBO value at the end of the year = $309,796
PBO value at the beginning of the year = $278,343
Addition in PBO during the year = $309,796 - $278,343 = $31,453
Interest cost = $278,343*6% = $16,701
Addition associated with service = $31,453 - $16,701 = $14,752
Answer:
(1) If discount rate is 7%, present value of $1,400 paid in three years is $3,674.04
(2) If discount rate is 8%, present value of $1,400 paid in three years is $3,607.94
(3)If discount rate is 9%, present value of $1,400 paid in three years is $3,543.81
Explanation:
We can use excel or manually calculate as below:
(1) Discount rate is 7%:
= $1400/(1+7%)^3+$1400/(1+7%)^2+$1400/(1+7%) = $3,674.04
(2) Discount rate is 8%:
= $1400/(1+8%)^3+$1400/(1+8%)^2+$1400/(1+8%) = $3,607.94
(3) Discount rate is 9%:
= $1400/(1+8%)^3+$1400/(1+9%)^2+$1400/(1+9%) = $3,543.81
I attached the calculation in excel for your reference.