Answer:
D) is not acceptable because such a guarantee would cause a conflict of interest pertaining to the IA's fiduciary duty to each client
Explanation:
The members of the North American Securities Administrators Association (NASAA) must follow their Model Rule which prohibits investment adviser firms from guaranteeing investment results, in other words they cannot guarantee a minimum profit.
In this case the employee suggested that if their clients didn't earn a minimum 12% profit, then they would refund any fees collected. But the IA firm is not allowed to guarantee the 12% value increase or profit.
Answer: Increases the price level by 5 percent
Explanation:
Monetary Neutrality is a theory in Economics that posits that when there is a change in money supply in an economy, the only variables affected are the nominal ones like price level and wages and Real variables like GDP and employment are not affected.
It holds that when there is an increase in money supply, there is an equivalent increase in Price level as well because the value of money has fallen by the rate of the monetary increase. The Price level rising at the same rate is to compensate.
A 5 percent increase in the money supply will therefore increase the price level by 5 percent.
Answer: Option (a) is correct.
Explanation:
Given that,
Dividend in 2016 = $20,000
Preferred Shares = 400
Par Value of Preferred Stock = 400 × 10 = $4000
Rate of Dividend of Preferred Stock = 5%
(a) Dividend to preferred Shareholders:
= Par Value of Preferred Stock × Rate of Dividend
= $4000 × 5%
= $200
(b) Dividend to Common Shareholders:
= Total Dividend - Dividend to Preferred Shareholders
= $20,000 - $200
= $19,800
Answer:
$2,000
Explanation:
Use the format
Jansen Company’s
Bank reconciliation as of May 31, 2013.
Balance as per Bank Statement
Add Outstanding Checks
Less Unpresented Checks
Balance as per Cash Book
Answer: (a) Retained earnings = Equity.
(b) Sales = Revenues.
(c) Additional paid-in capital = Equity.
(d) Inventory = Assets.
(e) Depreciation = Expenses.
(f) Loss on sale of equipment = Losses.
(g) Interest payable = Liability.
(h) Dividends = Dividends payable are a liability. Dividends paid are a decrease in the accumulated results of the company as they are distributed to the owners.
(i) Gain on sale of investment = Gains.
(j) Issuance of common stock = are investments by the owners that become part of the capital.
