Wholly owned subsidiary arrangements are preferred by firms which pursue global standardization or transnational strategies.
This arrangement gives a firm an advantage since it is able to use profits from one market to improve its position in another competitive market.
Another few advantages of wholly owned subsidiary arrangements are tax benefits, limited liability, promotes diversification.
Learn more about wholly owned subsidiary arrangements here:
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Answer:
D) Stock prices of companies that announce increased earning in January tend to outperform the market in February.
Explanation:
The above is consistent with the Efficient Market Hypothesis. All others are a direct contravention.
<em>The efficient market hypothesis (EMH), also known as the efficient market theory, is a hypothesis that states that the prices of shares contain all information and that consistent alpha generation is impossible.</em>
According to the hypothesis, stocks always trade at their fair value on exchanges, making it impossible for investors to purchase undervalued stocks or sell stocks for inflated prices.
This means that it should not be possible to outperform the overall market through professional stock selection or market timing.
The only way according to EMH that an investor can obtain better returns is by purchasing riskier investments.
By implication, this also means that it is not possible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.
You would note that in the option D, earning (which is a key driver for demand of stock) is announced in one month. The natural reaction would be for the demand for that stock to surge in the next month.
Answer:
The higher an investment’s risk, the HIGHER THE RETURNS AN INVESTOR WILL REQUIRE.
Explanation:
By saying that investors are risk averse, it means that given a similar level of returns, an investor will choose the investment with the lowest risk. That is why investors generally prefer and are willing to pay more for less risky investments, which results in lower returns (higher price ⇒ lower returns).
So high risk investments will always have a lower price than low risk investments, since the returns demanded by investors are proportional to the risk of the investment.
Answer:
Recognized Sales Value = $18,000
Explanation:
Fragment company selling Price is $300/Unit
40% trade discount is offered for purchases of 50 units and more. That is, $300 x 40% = $120.
This implies anyone buying 50 or more will pay only $180/Unit ($300 - $120)
Customer Purchased 100 units
Sales terms is FOB, which implies Fragment is responsible for transportation costs of the products from his warehouse to the Port of Shipment including loading onto the ship. The Buyer will be responsible for Marine Freight expense, Insurance, Off-loading and shipment to his own warehouse
The $7 Per Unit indicated will account for inland transport to Port of shipment
Recognized Sales = 100 units x $180 = $18,000
Cost of Haulage (Carriage outwards) is $7 x 100 units = $700
Answer:
Option C
Explanation:
Relationship marketing refers to the strategy aimed at encouraging customer satisfaction, communication, and tight-term commitment. It is built to create strong customer relationships by presenting them with content that is specifically relevant to their desires and needs, and by encouraging open lines of communication.
Relationship marketing involves building and preserving interaction with customers over period via online marketing or other techniques which improve their chances of coming back to your company in the future. In particular, regular customers are essential because they are major sources of new clients and reviews and are also inclined to make repeated purchases.
