Answer: b. The beta of the portfolio is higher than the highest of the three betas
Explanation:
The beta of a portfolio is calculated as a weighted average of the individual betas of the individual stocks. As such, the highest individual beta will be the upper limit of the portfolios entire beta.
For instance.
3 stocks A, B and C have betas of 1, 1.3 and 2 respectively.
A has a weight of 1%, B has a weight of 1% and C has a weight of 98%.
The portfolio beta will be;
= (0.01 * 1 ) + ( 0.01 * 1.3) + ( 0.98 * 2)
= 1.98
Even if the stock with the highest beta had an advantage of weighing such a high figure, it it mathematically impossible for the portfolio beta to be higher than it.
Answer:
Viral marketing is the Internet version of word-of-mouth marketing.
Explanation:
Viral Marketing is a term that can be best understood by considering the way a virus spreads continuously from one person to another and then to others.
Viral Marketing entails the <em>use of social media and other digital platforms or the internet to spread information.</em><em> </em>
It involves people coming in contact with an organization's marketing message and then sharing it with others who also share it with other people till it "goes viral".
Answer:
The answer is: C) decrease; increase
Explanation:
Currency appreciation occurs when the value of one currency increases in relation to another currency. In this case, country A´s currency will gain value against the currency of countries B and C (C´s currency is pegged to B´s currency).
This means that products from country A will be more expensive than products from countries B and C, which should lower country A´s exports and increase its imports.
Answer:
$889.70
Explanation:
The computation of the net present value is shown below:
= Present value of all yearly cash inflows after applying discount factor - initial investment
where,
The Initial investment is $10,000
All yearly cash flows would be
= Annual amount received × PVIFA for 4 years at 4%
= $3,000 × 3.6299
= $10,889.70
Refer to the PVIFA table
So, the net present value is
= $10,889.70 - $10,000
= $889.70
Answer:
B. The distribution will be a dividend if current earnings and profits are positive and exceed the distribution.
