Answer:
due diligence
Explanation:
Due diligence refers to an entrepreneur or a business man/woman basically doing their homework, i.e. investigating thoroughly about a business opportunity before deciding to accept a business proposal, enter a new market, or start a new business.
Many times, management is required by law to perform due diligence before entering a new business or signing certain contracts, but it is just common sense that before you start a new business you will try to find out if the business is feasible or not.
Answer:
D. The bank offers you a loan at 4% interest and a savings account that pays 5% interest.
Explanation:
<em>Arbitration</em> is a <em>financial strategy</em> that consists of the price difference between different markets on the same financial asset to obtain an economic benefit, usually without risk.
To perform arbitration, complementary operations (buy and sell) are carried out at the same time and wait for prices to adjust. The arbitration takes advantage of this divergence and obtains a risk-free gain. In other words, the arbitrajista is positioned short (sells) in the market with higher price and long (purchase) in the market with lower price. The benefit would come from the difference between the two markets.
Answer:
-1.0
Explanation:
Diversification in a portfolio refers to spreading investments in such a way so as to minimize risk.
The correlation coefficient r between two securities signifies how return from one security is related with another security. For example, two securities of the same sector may move in the same direction or positively correlated as in if price of one rises, the price of other rises too maybe not by the same margin.
In case of a negative correlation, the security returns move in opposite directions i.e the securities are least related to one another.
Maximum diversification is achieved when r is equal to -1 i.e the two stocks move in opposite direction by the same magnitude.
Answer:
The journal entries to record both transactions should be:
February 1, 2018, repurchase of 1,000 stocks at $47
Dr Treasury stocks 47,000
Cr Cash 47,000
April 10, 2019, treasury stocks were sold at $50
Dr Cash 50,000
Cr Treasury stocks 47,000
Cr Additional paid in capital 3,000
Treasury stocks account is a contra equity account with a debit balance that reduces the value of total stockholders' equity.