Not trying to sale to the wrong company or risking on a single product of some sort.
The expected return for stock A and B is 8.55% and 15.11% respectively.
<h3>What is the Expected return?</h3>
= (Probability of Recession × Return during recession) + (Probability of normal × Return during normal) + (Probability of boom × Return during boom)
Expected return for stock A:
= (0.20 * .05) + (0.57 * 0.08) + (0.23 * 0.13)
= 0.0855
= 8.55%
Expected return for stock B:
= (0.20 * 0.20) + (0.57 * 0.09) + (0.23 * 0.26)
= 0.1511
= 15.11%
Therefore, the expected return for stock A and B is 8.55% and 15.11% respectively.
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Answer:
a. a decrease in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
Explanation:
Diminishing returns In economics is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.
Due to the fire outbreak, the owner will continuously try to increase her manual effort (labor) into the business, which at a point will overwhelm her remaining capital, leading to the decrease in the marginal productivity of what's left of her capital.
Answer:
Money available for loans is $18,750
Explanation:
The formula for calculating the total amount of money a bank can loan is:
money available for loans = (1 - required reserve ratio) x total deposits
money available for loans = (1 - 25%) x $25,000 = 75% x $25,000 = $18,750
