<span>One
firm that is historically low and deals with negatively correlated stock
markets is Gold Extraction Companies. They are have very low correction with
overall stock markets. The basic reason for this low correlation is that, as
the stock market become bearish, investor sentiment becomes weak, due to which
most of the investors withdraw their money from stock market. Now once investor
has withdrawn the money from stock market , they search on safe investments
which will provide them good reruns, Gold is one of the investment which is
relatively safe and provide high returns. Thus withdrawn money from the share
market is invested in gold by investors. Thus Gold prices and companies related
to extraction of gold have very less correlation to the gold.</span>
Answer:
Hart Corp.'s note should be reported at $10,000
Maxx Inc.'s note should be reported at $7,883
Explanation:
Interest bearing notes that represent current accounts (due within one year) should be reported at face value. Hart Corp.'s note is due in nine months, so it should be reported at = $10,000
Maxx Inc.'s note must be recorded at present value because it is due in 5 years.
FV = $10,000 x 1.03⁵ = $11,592.74
now we must determine its present value using an 8% discount rate:
PV = $11,592.74 x 0.680 = $7,883
Answer:
A) To be more conservative in planning for an individual's retirement, decrease the individuals life expectancy.==>TRUE
B) A sensitivity analysis helps the advisor determine the single most effective factor in a retirement plan. ==> FALSE
C) A Monte Carlo Analysis uses a random number generator to provide the advisor with an array of possible outcomes utilizing the same fact patter. ==>TRUE
D) The capital preservation model assumes that at retirement the client will have exactly the same account balance as he did at his ideal working age. ==> TRUE
