1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
inn [45]
4 years ago
7

Diversification is most effective when security returns are _________. a. high b. negatively correlated c. positively correlated

d. uncorrelated
Business
1 answer:
Y_Kistochka [10]4 years ago
3 0

Answer: Option B  

                       

Explanation: In simple words, diversification refers to the process of allocating capital in different investments to reduce the overall risk of the investment portfolio.

Therefore, analyst tries to make portfolio in such a way that securities will be negatively correlated. If two securities are negatively correlated then the decrease of one will lead to proportionate increase of others.

This ensures that the investors money will not be depreciated but at the same time the potential for abnormal returns also decreases.

You might be interested in
"Stock in Daenerys Industries has a beta of 0.73. The market risk premium is 10 percent, and T-bills are currently yielding 5 pe
ololo11 [35]

Answer:

CAPM = 12.30%

Dividend Growth Model=  10.32%

Explanation:

According to the capital asset price model: Expected rate of return = risk free + beta x (market premium)

5% + (0.73 x 10%) = 12.30%

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

$35 = $1.6 x (1.055) / (r - 0.055)

r = 1.688 / 35 + 0.055 = 0.1032 = 10.32%

8 0
3 years ago
faiz enters into a contract to buy 350 acres from grain farm to cultivate hops and open a brewery. faiz fails to make the purcha
Debora [2.8K]

Based on the fact that Falz failed to make the purchase, Grain Farm most likely has the remedy of C ) Pay the difference between contract price and market price.

<h3>What is Grain farm to do?</h3>

When a buyer (Falz) gets into an agreement to buy a land or property and fails to do so, this falls under real estate and damage.

Under real estate and damage, the buyer  would then have to pay the seller (Grain Farm) a remedy which would be the difference between the market price of the property and the contract price.

Options for this question include:

  • the amount that Faiz expected to invest in the brewery
  • a percentage of Faiz's unrealized profit.
  • the difference between the contract and market prices of the land.
  • nothing-Grain Farm still owns the land.

Find out more on contract remedy at brainly.com/question/28480342

#SPJ1

7 0
1 year ago
What is the primary role of our banking system?
Serhud [2]

Answer:

See explanation section

Explanation:

The primary role of the banking system is to accept deposits from the general public so that the money can be given as a loan to the public in an effective way to foster the economy. It is the safest platform where people keep their money to get a bonus while people borrow money to continue operating.

6 0
4 years ago
Read 2 more answers
Kaspar Industries expects credit sales for January, February, and March to be $205,100, $263,100, and $314,500, respectively. It
SVETLANKA909090 [29]

Answer:

January $153,825

February $248,600

March $301,650

Explanation:

Computation for cash collections from customers for each month:

January February March

January: ($205,100 x 75%=$153,825) ($205,100 x 25%=$51,275) $0

February: $0 ($263,100 x 75%= $197,325) ($263,100 x 25%=$65,775)

March: $0 $0 ($314,500 x 75%=$235,875)

TOTAL $153,825 $248,600 $301,650

Therefore cash collections from customers for each month is :

January $153,825

February $248,600

March $301,650

7 0
3 years ago
Explain the role of finance in business​
nadezda [96]

Answer:

Definition 1:

FINANCE is the function in a business responsible for acquiring funds for the firm, managing funds within the firm, and planning for the expenditure of funds on various assets. ... FINANCIAL MANAGEMENT is the job of managing a firm's resources so it can meet its goals and objectives.

Definition 2:

Finance is critical in just about every business decision, from planning and budgeting and cash flow management to the capital structure and how you control risks and costs.

(please note that this was found by doing research.)

Hope this helps!

Can I have brainliest, please? I'm trying to earn 50 Brainliest.

6 0
4 years ago
Read 2 more answers
Other questions:
  • ________ is very strong and durable and is therefore commonly used for cookware, dinnerware, and much ceramic sculpture.
    9·1 answer
  • A speaker seeking to express the events leading to higher interest rates should choose which pattern of organization?
    11·1 answer
  • Wilson Co. has three segments -- Tennis, Golf, and Fishing. The Tennis segment is currently producing 2,000 units annually. The
    15·1 answer
  • Xyz corporation has suffered a major downturn in business and will not be able to pay interest on its bonds. this is an example
    12·1 answer
  • Why the aggregate demand curve slopes downward
    5·1 answer
  • Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation
    10·1 answer
  • A1 Co. has a process costing system. All materials are added when the process is first begun. At the beginning of May, there wer
    8·1 answer
  • Rod Dall Co. reports net income of $69,000. The income ratios are Rod 50% and Dall 50%. Indicate the division of net income to e
    12·1 answer
  • Marshall Company purchases a machine for $640,000. The machine has an estimated residual value of $60,000. The company expects t
    7·1 answer
  • Why is there is a difference between the roles of a manager, a monitor and an entrepreneur? Support your answer with an example.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!