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kicyunya [14]
3 years ago
15

An investor prefers to invest in companies that have high operating leverage. How can this be accomplished if the investor also

requires a portfolio beta of 1.0?
A. Invest 50% in cyclical stocks and 50% in firms with high operating leverage
B. Invest 50% in a market index fund and 50% in firms with high operating leverage
C. Finance part of the portfolio with borrowing
D. Invest a portion of the portfolio in U.S. Treasury securities
Business
1 answer:
Fittoniya [83]3 years ago
3 0

Answer:

B

Explanation:

Systemic risk are risk that are inherent in the economy. They cannot be diversified away. They are also known as market risk. examples of this risk include recession, inflation, and high interest rates. Investors should seek compensation for systemic risk. Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors

Market index fund is riskless and would have a beta of 1

by investing half in a riskless and half in a risky asset. beta would be equal to 1

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Suppose that the reserve requirement for checking deposits is 10 percent and that banks do not hold any excess reserves. If the
Vladimir79 [104]

Answer:

Take a look to the following explanation

Explanation:

Reserve ratio ,10%=0.1

Money multiplier=1/reserve ratio=1/0.1=10

If feds sells 1million$ bond the economy reserves increases by 1 million$ and money supply decrease by 10 million $(1*money multiplier).

If fed changes RR to 5% but banks choose to hold another ,5 percent as excess reserve ,then on aggregate actual reserve ratio will be 10%. So money multiplier would remain same,10 and so the money supply

8 0
3 years ago
The slope of a cost function can be defined as
garri49 [273]

Answer:

rgrbrgg35t54tgt

Explanation:

3 0
2 years ago
Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocol
Zanzabum

Answer:

Cannot be determined

Explanation:

If the marginal utility of the third chocolate bar is 18 units of utility and the marginal utility from the fourth bag of almonds is also 18.

For it to be determined if Adhira is maximizing her utility, we need to compare the different units of utility per product to the individual prices of the product.

The Utility Maximization rule states that <u>consumers decide to allocate their money incomes so that the last dollar spent on each product purchased yields the same amount of extra marginal utility</u>.

It is marginal utility per dollar spent that is equalized. and not absolute utility.

6 0
2 years ago
Estelle is trying to create an advertising message that communicates the tangible features of her company's laptop computers, te
ankoles [38]

Answer:

Answer is D. Informational.

Refer below.

Explanation:

Estelle is trying to create an advertising message that communicates the tangible features of her company's laptop computers, telling consumers about the relative advantages of her products as compared to other offerings in the market. Estelle is trying to create an informational appeal.

3 0
3 years ago
Read 2 more answers
Maya Company reports the following amounts for the year ending on December 31, 2004:Merchandise Inventory, January 1, 2004 : $70
Sveta_85 [38]

Answer:

$117,750

Explanation:

Maya Company Merchandise Inventory for the year ended December 31 2004

Merchandise inventory at the beginning $70,000

Add: Cost of transportation 2,300

Merchandise Purchase 195,000

Less: Purchase return and allowances (4,650)

Discount on purchase (3,500)

Cost of goods sold (158,700)

Add: Merchandise return 17,300

Merchandise inventory $117,750

8 0
2 years ago
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