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3 years ago

What is a benefit of stock markets?

Business

2 answers:

sleet_krkn [62]3 years ago

6 0

Answer:

currently there will be no benifits because of the Corona Virus because the stock market is crashing.

Kay [80]3 years ago

6 0

A benefit is that the market allows the average individual investor to get into a diversified portfolio.

It also allow the investor to check the values of their daily holdings and it allows them to add periodically to their accounts. In addition, the market encourages them to put money away for long term-goals.

You might be interested in

The following information is for Ayayai Corporation as of December 31, 2017.

Sergeeva-Olga [200]

Answer:

Flint Corporation current assets section of Balance Sheet

Particulars Amount

Cash ($23,500 + 21,100) 43,600

Less: Restricted for plant expansion 23,500 21,100

Trading Securities 9,700

Accounts receivable 73,300

Less: Allowance for bad debts 3,700 69,600

Interest receivables (19,600*7%*9/12) 1,029

Inventories

Finished goods 33,300

Work in Progress 13,000

Raw materials 59,600

Total Current Assets 186,229

4 0

3 years ago

Big Sky Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Big Sky Sports is owned and op

stiv31 [10]

Answer:

(a)

1. Kalispell State Bank

2. Glacier Boutique

3. Big Sky Sports

4. Kalispell State Bank

5. Big Sky Sports

6. Big Sky Sports

7. None of the above

8. Glacier Boutique

9. None of the above

10. Big Sky Sports

(b) Business transactions refers to the transactions that are related to only business, such as purchase of land, machinery, goods for business purposes. Any type of personal transaction is not included in business transaction.

6 0

2 years ago

If the company were to issue an annual zero-coupon bond with a maturity of 2 years and par value of $1,000, what would be the ar

Firdavs [7]

Answer:

Note: The complete question is attached as picture below

1a. The one year spot rate can be calculated using the one year zero bond.

PV * (1 + S1) = FV

1 + S1 = 1000 / 900

S1 = 1.1111 - 1

S1 = 0.1111

S1 = 11.11%

1b. PV of the 2 year bond = $950

Annual coupon = 1000 * 5% = $50

950 = 50 / (1 + S1) + (50 + 1000) / (1 + S2)^2

950 = 50 / 1.1111 + 1,050 / (1 + S2)^2

1,050/ (1 + S2)^2 = 950 - 45 = 905

(1 + S2)^2 = 1050 / 905

1 + S2 = 1.160221/2

S2 = 7.714%

1c. Price of the 2 year zero bond = 1,000 / (1 + 0.07714)^2

Price of the 2 year zero bond = 1,000 / 1.1602

Price of the 2 year zero bond = 861.9203586

Price of the 2 year zero bond = $861.92

3 0

3 years ago

For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) a single amount or

taurus [48]

Answer:

a. The present value of a future value of $10,000 is $7,310.

b. The present value of an annuity for a future value of $10,000 is $1,043.54.

c. Yes, you will retire with $1,036,226.07 .

Explanation:

a) Data and Calculations:

Future value = $10,000

Interest - 8% compounded semiannually

Period of investment = 4 years

Using the present value table, the discount factor of 0.731, the future value of $10,000 is $7,310

b) You will need to contribute $1,043.54 at the beginning of each period to reach the future value of $10,000.00.

FV (Future Value) $10,000

PV (Present Value) $7,306.90

N (Number of Periods) 8.000

I/Y (Interest Rate) 4.000%

PMT (Periodic Payment) $1,043.54

Starting Investment $0.00

Total Principal $8,348.30

Total Interest $1,651.70

c) $1,000,000 in 40 years:

FV (Future Value) $1,036,226.07

PV (Present Value) $47,698.45

N (Number of Periods) 40.000

I/Y (Interest Rate) 8.000%

PMT (Periodic Payment) $4,000.00

Starting Investment $0.00

Total Principal $160,000.00

Total Interest $876,226.07

5 0

3 years ago

Two investment advisers are comparing performance. Adviser A averaged a 20% return with a portfolio beta of 1.5, and adviser B a

Agata [3.3K]

Answer:

Option A is the correct answer.

A. Advisor A was better because he generated a larger alpha.

Explanation:

To determine which adviser would be the better stock selector, we will calculate the required rate of return of each adviser and the return actually averaged. The adviser with the greater abnormal return, which is return in excess of required rate, will be the better stock selector.

Using the CAPM, we can calculate the required rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate

rM is the market return

r of Adviser A = 0.05 + 1.5 * (0.13 - 0.05)

r of Adviser A = 0.17 or 17%

Abnormal or excess return of Adviser A = 20% - 17% = 3%

r of Adviser B = 0.05 + 1.2 * (0.13 - 0.05)

r of Adviser B = 0.146 or 14.6%

Abnormal or excess return of Adviser B = 15% - 14.6% = 0.4%

Adviser A performed better as the excessive return or alpha of Adviser A was 3% while that of Adviser B was 0.4%

7 0

2 years ago