Answer: Option (a) is correct.
Explanation:
Correct Option: Lower than his opportunity cost of that good.
Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.
If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.
In our case, if people obtained a good at a price that is lower than his opportunity cost of that good then he will be benefited from the trade.
The answer is over-diversification
“Over diversification occurs when the number of investments in a portfolio exceeds the point where the marginal loss of expected return is greater than the marginal benefit of reduced risk. When adding individual investments to a portfolio, each additional investment lowers risk but also lowers the expected return.”
Answer:
a.
P0 = 3.4 * (1+0.05) / (0.08 - 0.05)
P0 = $119
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
- r is the required rate of return
a.
P0 = 3.4 * (1+0.05) / (0.08 - 0.05)
P0 = $119
The best answer to that would be creating a thorough business plan. It can't be letter B because advertising is to attract customers. it can't be C too since an out of the way location for business is doomed to fail, and it can't be D too since this has nothing to do with investors. it is A because in order for you to attract investors, you have to give them a reason to invest in it. You have to convince them that your business idea is a good one and that they will be able to earn from it.
