Under perfect competition what sets the equilibrium price in the market

You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The risk-free return dur

nataly862011 [7]

Answer:

The fund with the highest information ratio measure is Fund B.

Explanation:

From the information provided:

Definition: The information ratio measures and compares the active return of an investment compared to a benchmark index relative to the volatility of the active return.

Formula: RETURN ON THE MARKET PORTFOLIO / STANDARD DEVIATION

Let's use this formula to calculate for Fund A, Fund B and Fund C.

Fund A : (20 - 6 - 0.8) ( 19 - 6 ) / 4 = 0.9

Fund B : (21 - 6 - 1 ( 13 ) / 1.25 = 1.6

Fund C : (23 - 6 - 1.2) ( 13 ) / 1.2 = 1.167

Therefore, The fund with the highest information ratio measure is Fund B.

6 0

4 years ago

There are many factors that affect an organization. Which factor influences an organization’s structure?

g100num [7]

"Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size, life cycle, strategy, environment, and technology."

3 0

3 years ago

Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the

marysya [2.9K]

Question

Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of Part P40:

Number of parts produced annually 26,000

Fixed cost $43,000

Variable cost 70,000

Total cost to produce 113,000

Jackson Corporation can purchase the part from an outside supplier for $4.62 per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If Jackson Corporation makes the part, how much will its operating income be?

Answer:

Change in operating income= $28,620

Explanation:

$

Total variable cost of making 70,000

Total cost of external purchase ($4.62×26,000) 120,120

Extra variable cost from external purchase 50,120

less Savings in fixed overheads(50%×43,000) ( 21,500)

Change in operating income 28,620

Note that the the balance of the fixed cost (50% of $43,000= 21500) were not included because they not relevant for the decision. They would be incurred either way.

Change in operating income= $28,620

8 0

4 years ago

Contestable markets true or false: if a firm is operating in a contestable market, it should operate at the efficient production

jok3333 [9.3K]

The first statement is false. A firm earning a zero profit is an action called predatory pricing, which there can be a temporary loss because of a super low price and when a new firm enters the market the new firm won’t be able to compete with a very low price forcing the new firm out of the market. This action can be a barrier of entry making the market less contestable. A firm in a contestable market should operate at efficient level of production and earn a minimal profit close to equilibrium.

It is true that a contestable market model has important policy implications for example to increase competition policy maker can decrease regulation so that new firm can easily enter the market. Policy makers can also force firms to allow other firms to use their networks encouraging new firms to enter the market and lessening the monopoly power of restricting supplies. Policy makers can also set up its own new firm and distribute its resources to small new firms to increase competition.

3 0

4 years ago

Because sales of Prince Sports in tennis-related products depends heavily on growth of the tennis industry, what marketing activ

never [62]

Answer:

They could hold local tournaments, and also sponsor a tennis team or donate tennis rackets to a school to promote playing of tennis.

Explanation:

Prince sports sales will increase when there is a growth in the tennis industry, and to help grow the industry there needs to be a marketing activity that will encourage tennis right from schools.

The young generation will eventually influence tennis in the future. So marketing activities should btarget them by holding local tournaments, and also sponsor a tennis team or donate tennis rackets to a school to promote playing of tennis.

8 0

3 years ago