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3 years ago

Which measure of downside risk predicts the worst loss that will be suffered with a given probability

Business

1 answer:

Neporo4naja [7]3 years ago

4 0

Answer: C. value at risk

Explanation:

Value at Risk allows for risk to be measured and by extension controlled as it works by measuring the worst loss that can be suffered by a project, company or portfolio over a given period and given a certain probability.

It is the favorite of financial institutions like commercial banks as they are able to find out just how much losses they face when investing or loaning money out.

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Ahrends Corporation makes 70,000 units per year of a part it uses in the products it manufactures. The unit product cost of this

Kazeer [188]

Answer:

$147,000

Explanation:

The computation of the financial advantage (disadvantage) of purchasing the part rather than making it is shown below;

Particulars Make Buy

Direct material $1,246,000 (70,000 × $17.80)

Direct labour $1,330,000 (70,000 × $17.80)

Variable manufacturing

overhead $70,000 (70,000 × $1)

Fixed manufacturing

overhead $623,000 (70,000 × ($17.10 - $8.20))

Purchase cost $3,395,000 (70,000 × $48.50)

Opportunity cost $273,000

Total cost $3,542,000 $3,395,000

So, the Advantage is

= ($3,542,000 - $3,395,000)

= $147,000

7 0

3 years ago

Nazim also recently bought bonds that have their interest rate tied to the consumer price index (CPI) so that he will be protect

Umnica [9.8K]

Answer:

purchasing power bonds

Explanation:

The whole idea behind constant purchasing power bonds is that when they are redeemed, the amount of money received by the bondholder will hold a stable amount of purchasing power instead of a nominal amount of dollars.

This type of bonds are similar to inflation-linked bonds which are adjusted to the value of the CPI.

The whole idea is that the bonds will always yield real interest rates.

3 0

3 years ago

Remington Arms is investigating its capacity to exploit new markets. Specfically, the firm is critically evaluating its availabl

zhuklara [117]

Answer: Critical resources

Explanation:

The critical resources are the types of resources that are only used for one time when the schedule gets increased and it basically refers to the time when the resources become overloaded.

According to the question, the Remington arms basically analyzing its specific capacity for exploiting the various types of new products and the services in the market.

In this process, the organization is typically evaluating its available capital in an organization and the various types of technical and the management expertise.

Therefore, Critical resources is the correct answer.

6 0

4 years ago

Hubert lives in San Francisco and runs a business that sells boats. In an average year, he receives $842,000 from selling boats.

aev [14]

Answer:

Explicit costs are normal costs of operating a business.

Implicit costs are opportunity costs meaning that they are the benefits foregone by engaging in a certain course of action.

The wholesale cost for the pianos that Hubert pays the manufacturer ⇒ EXPLICIT COST.

The salary Hubert could earn if he worked as an accountant ⇒ IMPLICIT COST.

The wages and utility bills that Hubert pays ⇒ EXPLICIT COST

The rental income Hubert could receive if he chose to rent out his showroom. ⇒ IMPLICIT COSTS

Accounting Profit = Revenue - Explicit costs

= 842,000 - 452,000 - 301,000

= $89,000

Economic Profit = Revenue - Explicit costs - Implicit costs

= 842,000 - 452,000 - 301,000 - 38,000 - 48,000

= $3,000

If Hubert's goal is to maximize his economic profit, he should stay in the piano business because the economic profit he would earn as an accountant would be -$3,000.

Economic profit as accountant = Salary + rental income - accounting profit from piano

= 48,000 + 38,000 - 89,000

= -$3,000

6 0

3 years ago

If a customer buys $10,000 worth of stock in a cash account, then sells the shares for $12,000 without first paying for the buy

katovenus [111]

Answer:

B) II and III.

Explanation:

Based on the information given the statement that are TRUE are II and III

II. The amount of $2,000($10,000-$12,000) which is the profit for the business will be given to the customer but the customer account will have to be frozen or put on hold for 90 days because the customer had not paid for the buy side before selling the shares for the amount of $12,000

III. In a situation where customer paid the amount for the buy side in full either before or after the fifth business day which is the day that follows the trading date, the customer account that had be frozen will be unfrozen or lifted because the buy side amount had be paid in full.

3 0

3 years ago