Answer:
Detailed step-wise solution given in the table attached.
Answer:
Liquidity risk is the inability to quickly sell a bond for its full value. This risk exists primarily in thinly traded issues. Default risk is the likelihood the issuer will default on its bond obligations and is the basis for bond ratings.
Liquidity is a prime determiner of yield spreads, explaining up to half of the cross-sectional variation in spread levels and up to two times the cross-sectional variation in spread changes that is explained by the effects of credit rating alone.
Liquidity risk Liquidity refers to the investor's ability to sell a bond quickly and at an efficient price, as reflected in the bid-ask spread. High-yield bonds can sometimes be less liquid than investment-grade bonds, depending on the issuer and the market conditions at any given time.
(If some parts overlap/relate to the exactly to other parts, I'm sorry. But there ya go !)
Answer: (A) Business process management
Explanation:
The business process management is one of the systematic and structure approach for monitoring, executing, designing and also control the process in the business management.
The main aim of the business process management is that it helps in improve the overall operation of the business management. It also control the workflow and also reduce the expenditure of the business.
It also achieve the various dramatic improvement by measuring the performance, quality and the cost. Therefore, Option (A) is correct.
Answer:
Risk-free rate decreases
Explanation:
The CAPM formula for calculating cost of equity requires one to know the value of 3 pieces of information only:
1. the market rate of return,
2. the beta value
3. the risk-free rate.
Ra = Rrf + [Ba∗(Rm−Rrf)]
where:
Ra=Cost of Equity
Rrf = Risk-Free Rate
Ba = Beta
Rm=Market Rate of Return
From the formula
Ra = Rrf + [1.2∗(Rm−Rrf)]
Ra = Rrf + 1.2Rm - 1.2Rrf
From Ra = 1.2Rm -0.2Rrf
From the expression above, it can be seen that the lower the value of Rrf (Risk-Free rate), the higher the value of Ra.
Answer:
Net income= $2,328,000
ROA= 12%
ROE= 25.30%
Explanation:
Aquilera incorporation has a sales of $19.4 million
The total assets is $14.4 million
The total debt is $5.2 million
The profit margin is 12%
The net income can be calculated as follows
= profit margin × sales
= 12/100 × 19,400,000
= 0.12 × 19,400,000
= $2,328,000
The ROA can be calculated as follows
= Net income/Average Sales
= 2,328,000/19,400,000
= 0.12 × 100
= 12%
The ROE can be calculated as follows
= Net income/Total equity
Total equity= Total assets - Total debt
= 14,400,000-5,200,000
= 9,200,000
= 2,328,000/9,200,000
= 0.2530 × 100
= 25.30%
