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Juliette [100K]
3 years ago
9

The benefits of portfolio diversification are highest when the individual securities have returns that Group of answer choices A

re counter-cyclical Vary indirectly with the rest of the portfolio Are uncorrelated with the rest of the portfolio Vary directly with the rest of the portfolio
Business
1 answer:
emmasim [6.3K]3 years ago
4 0

Answer:

Are uncorrelated with the rest of the portfolio

Explanation:

Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio

Non systemic risk are risks that can be diversified away. they are also called company specific risk. Examples of this type of risk is a manager engaging in fraudulent activities.

The highest benefit of diversification is when the securities are uncorrelated

Correlation is a statistical measure used to measure the relationship that exists between two variables.

1. Positive correlation : it mean that the two variables move in the same direction. If one variable increases, the other variable also increases.

For example, there should be a positive correlation between quantity supplied and price

When there is a positive correlation, the graph of the variables is upward sloping

2. Negative correlation :  it mean that the two variables move in different direction. If one variable increases, the other variable decreases.

For example, there should be a negative correlation between quantity demanded and price

When there is a negative correlation, the graph of the variables is downward sloping

3. Zero correlation : there is no relationship between the variables

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Lawrence has set a personal goal of being president of LMN Corp. by the time he is 30. He has determined that nothing will stand
Vika [28.1K]

Answer:

Personal goals

Explanation:

Lawrence's determination to be president makes him to stop at nothing in achieving his personal goals. Causing him to take a decision that might not be ethically correct.

This individual factor is basically the sole reason he decided to rat that information to the press. Call it his drive to achieve his personal goals.

3 0
3 years ago
Which accurately describes the terms of this mortgage? Check all that apply.
vredina [299]

Answer: 3, 4, 5.

3. Monthly payments must be made for 30 years.

4. The annual interest rate is 4.8 percent.

5. The homeowner is borrowing $200,000.

Explanation:

8 0
3 years ago
monopolistically competitive firms are unable to produce enough output to reach the average total cost because of the presence o
stich3 [128]

Monopolistically competitive firms are unable to produce enough output to reach the average total cost because of the presence of other monopolistically competitive firms in the industry.

  • Monopolistic competition arises when several businesses provide rival goods or services that are comparable but imperfect replacements.
  • Entry barriers are low in monopolistic competitive industries, and actions made by one business do not immediately impact those of its rivals. Pricing and marketing choices are how the rival firms set themselves apart.
  • Businesses engaged in monopolistic rivalry distinguish their goods through price and marketing tactics.
  • The expenses or other impediments that prohibit new rivals from joining a market are minimal in monopolistic competition.
  • Between perfect and monopolistic competition, known as monopolistic competition, there is monopolistic competition, which incorporates aspects of both and entails businesses with comparable but distinct product offers.

Learn more about Monopolistic competition, here

brainly.com/question/28189773

#SPJ4

4 0
1 year ago
The following data is available for Everest Company:
Lady bird [3.3K]

Answer:

a. Current ratio = Total current assets / Total current liabilities = $366 / $226 = 1.62 to 1

b. Average receivable = (Beginning receivables + Ending receivables) / 2 = ($156 + $160) / 2 = $158

Average collection period = Number of days in year / Credit sales * Average accounts receivable = 365 / $1,702 * $158 = 33.88 days

 

c. Average Stockholder's equity =   (Beginning equity + Ending equity) / 2 = ($500 + $550) / 2 = $525

Return on stockholder's equity =  Net income / Average stockholder's equity = $112 / $525 = 21.33%  

d. Earnings per share = Net income / Common shares outstanding = $112 / 46 = $2.43 per share

Price earnings ratio = Market price per share / Earnings per share = $50 / $2.43 = 20.58 times

e. Dividends per share = Dividends / Common shares outstanding = $92 / 46 = $2.00 per share

Dividend yield ratio = Dividend per share / Market price per share = $2.00 / $50 = 4.00%

Workings

Beginning retained earnings $346

Add: Net income                            $112

Less: Ending retained earnings   -<u>$366</u>

Dividends                                        <u>$92</u>

5 0
3 years ago
Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $10,000. If the issuing corporation red
zheka24 [161]

Answer:

Bonds Payable         $1000000 Dr

     Gain on redemption                   $15000 Cr

     Discount on bonds Payable      $10000 Cr

     Cash                                            $975000 Cr

Explanation:

The face value of bonds payable is $1000000 while they are a discount bond and carry a discount of $10000. The value of bonds is 1000000 - 10000 = 990000.

The bonds, however, are redeemed at 97.5 which means they are redeemed by paying 97.5% of face value which comes out to be 975000.

Thus, the difference between their value and the redemption price is the gain as value is greater than the price paid for them at redemption.

Gain = 990000 - 975000 = $15000

5 0
3 years ago
Read 2 more answers
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