1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anarel [89]
3 years ago
7

As a new investment adviser (IA) firm, your company wants to obtain more clients. In an attempt to do so, one of the employees s

uggests a one-year offer to prospective clients. The offer would refund client's management fees if the client's portfolio value did not increase by 12% at the end of the first year. This fee arrangement:
Business
1 answer:
IRISSAK [1]3 years ago
8 0

Answer:

D) is not acceptable because such a guarantee would cause a conflict of interest pertaining to the IA's fiduciary duty to each client

Explanation:

The members of the North American Securities Administrators Association (NASAA) must follow their Model Rule which prohibits investment adviser firms from guaranteeing investment results, in other words they cannot guarantee a minimum profit.

In this case the employee suggested that if their clients didn't earn a minimum 12% profit, then they would refund any fees collected. But the IA firm is not allowed to guarantee the 12% value increase or profit.

You might be interested in
Because of his business's recent success, Sam has decided to expand his Sam's Swimming Pool Cleaning to include another branch.
ivann1987 [24]

Answer: initially Sam gross profit would drop. But overtime when he starts gaining customers in his new branch added to the already existing customers in his old branch there would a very large gross profit increase.

Explanation: Gross profit is the percentage of revenue a company retains after accounting for cost of goods/services.

In this case payment of staffs in both the old and new branches would be accounted for, with the new branch still very much dependent on the old branch for payment of staff until it can get its own customers, only then would the new branch be able to be self reliant and also make profit.

6 0
3 years ago
Read 2 more answers
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $6
JulsSmile [24]

Answer:

$26,800

Explanation:

Sales revenue after further processing:

= Units produced from each ton of clypton × Selling price per unit

= 7,300 × $15

= $109,500

Sales revenue at split off point:

= Units produced from each ton of clypton × Selling price per unit

= 7,300 × $10

= $73,000

Incremental revenue:

= Sales revenue after further processing - Sales revenue at split off point

= $109,500 - $73,000

= $36,500

Incremental profit = Incremental revenue - Incremental cost

                              = $36,500 - $9,700

                              = $26,800

Therefore, financial advantage (disadvantage) of further processing product X15 is $26,800.

3 0
3 years ago
Can someone explain the relationship between consumer expectations and economic performance?
maks197457 [2]
If a consumer believes that the price of the good will be higher in the future he is more likely to purchase the good now. If the consumer expects that her income will be higher in the future the consumer may buy the good now. In other words positive expectations about future income may encourage present consumption.
5 0
3 years ago
Arundel Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has
Ipatiy [6.2K]

Answer:

After the adjusting entry is made, Allowance for Doubtful Accounts balance is a credit balance of $22,290

Explanation:

Arundel Company uses aging to estimate uncollectibles.

Estimated uncollectibles = $250,000 x ( 1 - 99.5%) + $70,000 x (1 - 91%) + $30,000 x (1 - 73%) + $8,000 x (1 - 17%) = $1250 + $6,300 + $8,100 + $6,640 = $22,290

The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000.

Bad debt Expense = $22,290 + $2,000 = $24,290

The adjusting entry:

Debit Bad debt Expense $24,290

Credit Allowance for Doubtful Accounts $24,290

After the adjusting entry is made, Allowance for Doubtful Accounts balance is a credit balance of $22,290

4 0
3 years ago
The consumer price index is used toGroup of answer choicesturn dollar figures into meaningful measures of purchasing power.chara
jenyasd209 [6]
Im confused on what the question is
8 0
2 years ago
Other questions:
  • Eric's textbook costs $90, and he can resell it in one year's time for $45. if the annual interest rate is 10%, then the present
    8·1 answer
  • Men who tried the Gillette Fusion razor were so satisfied with it that 60 percent of them adopted the product permanently. Men w
    13·1 answer
  • What is a natural monopoly?
    12·1 answer
  • The CPI for this year is calculated by dividing thevalue of all goods and services produced in the economy this year using this
    7·1 answer
  • Identify the trade-restraining practice that this example demonstrates. Tubifor, Inc. purchases all available imported lumber so
    13·1 answer
  • e lottery winner who is going to invest in utility bonds and a savings account using the following data: Assume that her total w
    10·1 answer
  • The debit side of an account
    11·1 answer
  • A bond that pays interest annually yielded 7.25 percent last year. The inflation rate for the same period was 5.50 percent. What
    12·1 answer
  • At Smartech, a company dealing in software products, employees often complain about the lack of clarity regarding the tasks they
    13·1 answer
  • Discretionary fiscal policy is defined as fiscal policy Group of answer choices initiated by a Presidential proclamation. left t
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!