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blsea [12.9K]
3 years ago
5

Market risk refers to the tendency of a stock to move with the general stock market. A stock with above average market risk will

tend to be more volatile than an average stock, and its beta will be greater.
True
False
Business
1 answer:
Stolb23 [73]3 years ago
4 0

Answer: True.  Market risk refers to the tendency of a stock to move with the general stock market. A stock with above average market risk will tend to be more volatile than an average stock, and its beta will be greater.

Explanation: If a stock has a beta that is greater than 1, there is a higher risk for the stock. High risk stocks have a higher potential for return, but are also easier to lose funds from.

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There may be a maximum balance requirement for a savings account.<br> True<br> False
luda_lava [24]

Answer:

true

Explanation:

For example, if a bank account has a $100 minimum balance requirement, you want to make sure that you don't let your balance fall to $99.99 or less.

4 0
3 years ago
You own a coal mining company and are considering opening a new mine. The mine will cost $120 million to open. If this money is
GalinKa [24]

Answer: B. There are two IRRs so you cannot use the IRR as a criterion for accepting the opportunity.

Explanation:

The Internal Rate of Return can be useful in capital budgeting to enable a company know if an investment will be profitable. It is defined as the discount rate that causes the Net Present Value(NPV) to be zero. If the IRR is greater than the required return then the project should be accepted as it will have a profitable NPV.

IRR has some problems however and one of them is reflected here. There can sometimes be two IRRs and when this happens, using IRR as a viability measure cannot be done because a single rate is needed for comparison with the required return.

4 0
3 years ago
When shopping you notice that a pair of jeans costs $20 and that a tee-shirt costs $10. you compute the price of jeans relative
WARRIOR [948]
So, the dollar price of the jeans is the nominal variable, and the relative price is the real variable.   The relative price of the jeans have been adjusted to inflation. The dollar price hasn't been adjusted for inflation, hence why it is the nominal variable (not adjusted for inflation).
5 0
3 years ago
(Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for $50,000. Th
Romashka-Z-Leto [24]

Answer and Explanation:

The computation is shown below:

For year 1

According to the Company's Books Depreciation

= (Orginal Cost - Salvage value) ÷ useful Life

= ($50,000 - $5,000)  ÷ 10 years

= $4,500

According to the Income Tax Depreciation

= Cost × MACRS Rate for Year 1

= $50,000  × 20%

= $10,000

So, the difference in year 1 is

= $10,000 - $4,500

= $5,500

For year 2

According to the Company's Books Depreciation

= (Orginal Cost - Salvage value) ÷ useful Life

= ($50,000 - $5,000)  ÷ 10 years

= $4,500

According to the Income Tax Depreciation

= Cost × MACRS Rate for Year 2

= $50,000  × 32%

= $16,000

So, the difference in year 1 is

= $16,000 - $4,500

= $11,500

7 0
3 years ago
You have taken out a $350,000, 3/1 ARM. The initial rate of 6.0% (annual) is locked in for 3 years. Calculate the outstanding ba
Vilka [71]

Answer:

Explanation:

  • The Monthly Payment = Loan Amount / PVAF (360,0.50%)

  • The Monthly Payment = 350000 / 166.7916

  • The Monthly Payment = $2098.43

  • Loan Balance after 3 years = PV(0.50%,324,-2098.43) = $336294.2

5 0
3 years ago
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