Answer:
<u>sell the stock which will drive it's expected return even lower.</u>
Explanation:
An investor wants to be compensated for the risk undertaken in the form of return. When investors believe that a stock is not providing sufficient return, such stocks would be sold by the investor.
When a stock is not performing well i.e it's current market price goes down, all the investors holding that stock will sell it , leading to it's market price going further down.
Since the market price goes further down, the expected return on such a stock would further decline.
Answer:
A. Contingency planning
Explanation:
Contingency planning refers to the an approach in forecasting unexpected events by developing an action plan to appropriately respond to such threats. In this scenario, despite that the company expects favourable sales in the future, it is planning to face an unexpected drop in sales.
Disagree. Liabilities can be met in ways other than money.
In accounting, a liability is a debt that is owed and must be payed with money, but there are also legal liabilities and other obligations that are not monetary.
Answer:
The answer is 14.4%
Explanation:
Calculations as follows:
Total returns 1600*12*5=96,000
Plus the capital investment of 100,000
Total amount 100,000+96,000=196,000
196,000=100,000(1+r/100)∧5
196,000/100,000=(1+r/100)∧5
5√1.96=1+ r/100
5√1.96 -1= r/100
1.1440-1 = r/100
0.144= r/100
r = 14.4%
