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3 years ago

Speculative investments are high-risk investments with the possibility of high returns in a short period of time.

2 answers:

8 0

True. Risk in investment can be defined as the possibility that the investor may lose a big portion or all of the initial investment or make very high returns in a short period. Risk which is often likened to volatility dictates that the higher the volatility the higher the chances of returns. Speculative investments such as leveraged ETFs(commodities such as gold, oil, silver), options, venture capital trusts are considered high risk and often so offer handsome returns or cost the investor all or even more of their initial capital. It is however important to note that high risk does not automatically translate into high returns. The intrinsic value of the investment vehicle among other factors need to be considered in depth to determine if the investment is worth the risk

oee [108]3 years ago

3 0

the answer would be true

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South Carolina is facing budget cuts. The number of employees needs to be reduced over the next three years at all state agencie

choli [55]

Answer: This approach is called attrition.

Explanation:

Attrition is the process of reducing the workforce of the company due to various reasons. Here South Carolina has lot of budget constraints which forces the state to reduce the in take of new employees. This approach can also be called as hiring freeze so that the payroll can be reduced instead of doing layoffs.

The strength of the state is reduced in order to reduce the expenses and money pay outs. When there is a deficiency in the budgets actions have to be taken accordingly to minimize the effects.

8 0

3 years ago

Cromwell's Interiors is considering a project that is equally as risky as the firm's current operations. The firm has a cost of

mario62 [17]

Answer:

Cost of capital = 12.40%

Explanation:

given data

cost of equity = 15.4 percent

pretax cost of debt = 8.9 percent

debt-equity ratio = 0.46

tax rate = 34 percent

to find out

What is the cost of capital for this project

solution

first we get Equity multiplier that is express as

Equity multiplier = 1 + debt-equity ratio ..................1

put here value

Equity multiplier = 1 + 0.46

Equity multiplier = 1.46

and

Weight of equity will be

Weight of equity = $\frac{1}{Equity\ multiplier}$ ....................2

put here value

Weight of equity = $\frac{1}{1.46}$

Weight of equity = 0.6849

and

Weight of Debt will be here

Weight of Debt = 1 - weight of equity ...........................3

put here value

Weight of Debt = 1 - 0.6849

Weight of Debt = 0.3151

Cost of capital will be here as

Cost of capital = Weight of Debt × pretax cost of debt × (1- tax rate ) + cost of equity × Weight of equity .....................4

put here value we get

Cost of capital = 0.3151 × 8.9% × (1 - 0.34) + 15.4% × 0.6849

Cost of capital = 12.40%

7 0

3 years ago

With a(n) _______, the full amount of the loan is received when the contract is signed, but only the interest is paid over the l

Vikentia [17]

Answer: Balloon Loan

A balloon loan is a type of loan where the final payment is usually much larger than the payment preceding it.

In a balloon loan, the entire loan amount is given to the borrower as soon as the loan is approved and the contract is signed.

The interest falls due and is paid during the life of the loan.

The principal however, is paid as a balloon payment on the final day of the life of the loan.

6 0

3 years ago

A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number

Grace [21]

A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be 120,000 shares.

Stocks are gadgets of fair ownership in an agency. For a few businesses, shares exist as an economic asset providing for an identical distribution of any residual profits, if any are declared, in the shape of dividends.

In monetary markets, a share is a unit used in mutual finances, limited partnerships, and real estate funding trusts. Percentage capital refers to all of the stocks of an agency. The owner of shares within the agency is a shareholder of the business enterprise.

A share is referred to as a unit of possession that represents the same share of a business enterprise's capital. A percentage entitles the shareholders to an equal declaration of earnings and losses of the employer. There are majorly sorts of shares i.e. equity stocks and desire stocks.

Learn more about shares here brainly.com/question/25630152

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3 0

2 years ago

Why is it difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures?

Andre45 [30]

Answer:

1. It is not easy to get funds for a start up, as many banks do not consider it as a successful decision to provide loan to a start up, as the feasibility of recovery of loan cannot be identified and guaranteed.

2. Venture capitalists also faces the same issue as of bank, also they are large equity investors and tend to invest in even larger project.

3. Private investors do not blindly invest and rather are more cautious then banks or venture capitalists, as because they do not huge funds to invest, and with less amount of investment they need even higher assurance.

4. Public stock is never available for a start up as for public stock issue you need great credibility, and good previous record.

4 0

3 years ago