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igor_vitrenko [27]
3 years ago
11

If the expected return generated by a financial asset is greater than what is required for compensating the asset's risk, the de

mand for the financial asset will start rising exponentially such that the initial cost incurred to take a position in the financial asset (the price of the financial asset) will increase. This in turn will depress the expected returns generated by the financial asset. This process will continue till the excess return being generated by the asset ceases to exist and the asset's price becomes commensurate with the asset's risk-return profile. This entire process is known as arbitrage.
Business
1 answer:
Elis [28]3 years ago
4 0

Answer:

False

Explanation:

Arbitrage refers to buying and selling stocks, commodities, bonds, currencies, or any other type of security. This process is carried out simultaneously, and a profit is made when the purchase price is lower than the selling price. E.g. a trader that purchases gold from a European seller and immediately sells it to an Asian buyer at a slightly higher price.

As technology advances, arbitrage has become more difficult to carry out because information is available to everyone. Before, a company could purchase a good (e.g. beef) in Texas and sell it at a higher price to a buyer in New York.

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Your company is considering two mutually exclusive projects. Project A has an initial cost of $80,000 and generates expected cas
katovenus [111]

Answer:

The company should accept Project B because it generates more value per year as compared to Project A.

Explanation:

Explanation can be seen in the file attached.

Download docx
8 0
3 years ago
Read 2 more answers
Shannon Reeves and Tish Phillips remember their experiences with student protests in the 1960s. Shannon remembers seeing Jimi He
NeTakaya

These memories about cultural heroes and events are one of the chief characteristics of an age <u>cohort</u>.

<h3>What does a cohort mean?</h3>

A cohort is a group of people who have similar demographic traits or life experiences, such as age but not exclusively. Cohort effects are typically masked by age in cross-sectional research. Cohorts can be, for instance: individuals who had children in the same year. People who retire simultaneously.

<h3 /><h3>What characteristics do cohort study have?</h3>

The distinguishing characteristic of a cohort study is that the researcher selects participants at a time when they do not yet have the desired outcome and examines the occurrence of the desired outcome between groups of exposed and unexposed (or less exposed) people.

To know more about the cohort study, visit:

brainly.com/question/29654815

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5 0
1 year ago
Gems Corp. is a leading jewelry brand that finds it hard to make as much profit as its competitors. In order to overcome this, t
Leni [432]

Answer: B - Internal Analysis

Explanation: Internal Analysis involves a company looking inwards to determine it's competencies, strength, weakness and advantages. Internal anaylsis usually incorporates a SWOT analysis.

A SWOT analysis is the analysis of the strength, weakness, opportunities and threats of the organisation.

An external analysis involves analysing the market place and economy to identify trends and put measures in place to take advantage of current trends to ensure profit maximization.

Competitior anaylsis involves analysising the competitions of an organisation to identify threats and opportunities so as to maximaise profit

Client advantage can arise from building a loyal customer base that always patronise the business or having a company been one of the few producers of a product.

In the case of Gems Corps, they looked inwards and made improvements to how the company is run.

Therefore,Gems Corps made use of Internal Analysis.

I hope my answer helps.

Goodluck

4 0
3 years ago
It is necessary to retain information for two significant reasons: legal obligation and business needs. Data that occupies the c
baherus [9]

Answer:

The correct answer is letter "B": business.

Explanation:

Business data represents the information of the transactions a company carries out as a result of its operations. Information about suppliers and customers is recorded for control purposes and, mainly, to cover the legal obligation to report the accounting analysis of the firm in the Financial Statements.

Besides, the accounting information of a firm allows managers to compare budget expectations with the current performance of the company to take decisions on what course the entity should follow to reach its objectives.

6 0
3 years ago
For 2019, Skresso Co. reported $1.82 of earnings per share of common stock. During 2020, the firm had a 4% common stock dividend
mart [117]

Answer:

$1.75

Explanation:

Earnings per share to be reported = Earnings per share of commo stock * (1 - 4%)

Earnings per share to be reported = $1.82 * 96%

Earnings per share to be reported = $1.7472

Earnings per share to be reported = $1.75

So, the 2019 earnings per share to be reported in the annual report for 2020 are $1.75.

4 0
3 years ago
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