If that happen, other investors that bet for the opposite cause of your investment would be the one that gained that money, and you will still able to keep that stocks to collect dividend as long as you don't sell it.
(this circumtances won't happen if the reason you lost the money is the firm going into bankruptcy)
By the use of Lifo in a period where the prices rise, companies avoid to report paper profit, also called phantom profit, as economic gain. Have in mind that in periods of changing prices, the cost flow assumption can have a significant impact onincome and on evaluations based on income. That is why when Lifo is used the companies tend to <span>report the lowest net income </span>
Answer: This rate setting scheme creates an adverse selection problem: Homeowners with houses on unstable soil are more likely to purchase insurance than homeowners with houses that rest on bedrock
Explanation:
California has its own earthquake insurance program for homeowners and the rates vary by the ZIP code, which depends on the proximity of nearest fault line.
However, critics claim that the people who set the rates ignored soil type. Some houses rest on bedrock while others sit on unstable soil. If the soil type is used, rate setting scheme creates an adverse selection problem.
An adverse selection problem is tendency of those in high-risk areas to purchase the insurance claim because there are higher chances they may get affected. Therefore, the homeowners with houses on unstable soil will more like buy insurance than the homeowners with houses that rest on bedrock.
Xi-Ling focussed on her debt management by setting aside a part of net income in paying down the debts. The amount that Xi-Ling put towards the debt is $65.75.
<h3>What is Debt Management?</h3>
Debt management is a tool that facilitates keeping the debt under control through planning and budgeting. It helps in clearing the problem of debt at an affordable pace.
Xi-Ling has a monthly salary of $2,315 out of which 5% is her net income. The net income therefore is:
Out of the net income of $115.75, she keeps aside $50 and uses the rest in paying down her debts. Therefore, the amount used for debts is:
Hence the amount Xi- Ling put towards paying down the debts is $65.75.
Learn more about debt management here:
brainly.com/question/7924883
