Answer: A) (i) will; (ii) will not
Explanation:
The optimal portfolio should be one where the assets are diversified such that returns can be made regardless of the direction the economy is going. For this to happen, asset classes need to have a low correlation with one another.
If the correlation between gold and stocks is low therefore, gold should and will be held as a component in the portfolio. If the correlation between gold and stocks is 1.0 - this means that they are perfectly correlated and move together - gold should not be in the optimal portfolio as it would be too risky.
Answer:
B
Explanation:
B: switches from competitive to monopolistic once the firm's patent runs out.
Answer:
The false statement is letter "B": all corporate net income is paid out as dividends.
Explanation:
The Modigliani-Miller Theorem or M&M is used in financial and economic studies to analyze the value of a firm such as a business or a corporation. The M&M theorem states that a firm's value is based on its ability to earn revenue plus the risk of its underlying assets. This value is independent of the way the company distributes its profits or finances its operations.
In that case, dividends have nothing to do with how the M&M theorem values a business.
Hello there!
Answer:
Your answer would be "Net present value"
Explanation:
The reason why "Net present value" would be the correct answer is because this is the method that is specifically used when two investments are mutually exclusive. What "mutually exclusive" means is that something can't occur, or happen, at the same time. What this sentence is saying is that two investments can't happen at the same time. A "Net present value" is the value of the money that is currently present, while being contrasted into future value when it is invested in, specifically in compound interest. What people would use "Net present value" for when two investments are mutually exclusive is to see how much value the different investments will bring, and see which investment they would want to choose first, specifically for profit wise. This is the reason why net present value would be correct.
Answer:
Option D is correct. Concentrating resources on areas that need the most change
Explanation:
Because the Finance head is trying to increase the returns on the reliable projects that has tendency to increase returns by minor investments. This will ensure secure future for the company and efficient working of the operations of the company.
Furthermore vision is associated with the company mission and personal brand and building trust takes a lot of time. And also that the romanticizing risk means the finance head is thinking to take the risk because the company can bear these risks.