- Would an investment generate attractive returns?
- What is the degree of risk inherent in the investment?
- Should existing investment holdings be liquidated?
- Will cash flows be sufficient to service interest and principal payments to support the
firm's borrowing needs?
- Does the company provide a good opportunity for employment, future advancement, and
employee benefits?
- How well does this company compete in its operating environment?
- <span>Is this firm a good prospect as a customer?</span>
Answer:
The correct answer is True.
Explanation:
Whenever a conflict arises within the classification of projects between the expected monetary value and the standard deviation, the coefficient of variation is used to try to solve the problem. For this reason, it is concluded that the coefficient of variation is a standardized measure of risk.
Answer:
The correct answer is letter "E": Through advertising, a company can control, to some extent, to whom the message is sent.
Explanation:
Advertising is the main key to Marketing by which companies promote their goods or services in an attempt to attract a target population. However, the process of determining what advertising technique a firm will use is not that simple. A series of psychological approaches are used to reach consumers strategically.
<em>Companies at a certain level, manage their marketing audience. Though, different mediums of communication allow people of all kinds, not necessarily the company's target population, to be aware of the promotion somehow.</em>
Answer:
The investor will prefer asset U. So the correct answer is option D
Explanation:
To choose between these stocks, we will calculate the coefficient of variation (CV) which is used to assess the risk per unit of expected return. As most people are risk averse, we assume that the investor is risk averse. We will calculate the CV for all three investments and the stock having lowest CV will be selected.
<u>Coefficient of Variation (CV)</u>
Coefficient of Variation = standard deviation / expected return
<u />
Asset Q = 5.5% / 6.5% = 0.846
Asset U = 5.5% / 8.8% = 0.625
Asset B = 6.5% / 8.8% = 0.738
Thus, asset U has the lowest CV and the investor =, being a risk averse, will prefer asset U.
