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Korolek [52]
3 years ago
13

A financial analyst, assesses the likelihood of various possible future values of a stock price, assigns the following probabili

ty values to the predicted future price of the stock:
Future price: $40 $50 $65
Probability: 0.5 0.3 0.2

What is the expected value of the future stock price?

a. 16
b. 48
c. 50
d. 33.3
e. 51.6
f. 40
Business
1 answer:
alina1380 [7]3 years ago
8 0

Answer:

b. 48

Explanation:

The computation of the expected value of the future stock price is as follows;

= Respective future price × respective probabilities

= $40 × 0.5 + $50 × 0.3 + $65 × 0.2

= $20 + $15 + $13

= $48

hence, the  expected value of the future stock price is $48

Therefore the correct option is b.

The same is relevant

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On March 31, 2019, Brodie Corporation acquired bonds with a par value of $400,000 for $425,800. The bonds are due December 31, 2
icang [17]

Answer:

1. March 31, 2019

Dr Investment in held-to-maturity debt securities

$413800

Dr Interest income $12,000

Cr Cash $425800

2. June 30, 2019

Dr Cash $12,000

Cr Investment in held-to-maturity debt securities

$300

Cr Interest income $11700

3. December 31, 2019

Dr Cash $24000

Cr Investment in held-to-maturity debt securities

$600

Cr Interest income $23400

2. Assets overstated

Profit overstated

Explanation:

1. Preparation of the journal entries for Brodie to record the purchase of the bonds and the first two interest receipts.

1. March 31, 2019

Dr Investment in held-to-maturity debt securities

$413800

Dr Interest income $12,000

(400000*12%*3/12)

Cr Cash $425800

(To record the purchase of held-to-maturity securities)

2. June 30, 2019

Dr Cash $12,000

(400000*12%*3/12)

Cr Investment in held-to-maturity debt securities

$300

[($12,000/10)*3/12]

Cr Interest income $11700

($12,000-$300)

(To record the interest and amortization)

3. December 31, 2019

Dr Cash $24000

(400000*12%*6/12)

Cr Investment in held-to-maturity debt securities

$600

[($12,000/10)*6/12]

Cr Interest income $23400

($24,000-$600)

(To record the interest and amortization)

2. Based on the information given assuming Brodie failed to SEPARATELY RECORD THE INTEREST AT ACQUISITION, the errors that would occur in the company’s financial statements would be OVERSTATED ASSETS in the balance sheet and the PROFIT would as well be OVERSTATED.

6 0
3 years ago
If a family spends its entire budget in a given time frame, the family can afford either 14 outings or 24 household items. Assum
AURORKA [14]

Answer:

1.71 household items

Explanation:

In this question, we learn that the family will only consume two goods: outings and household items. The family can either have access to 14 outings or 24 household items. This means that:

opportunity cost of 14 outings = opportunity cost of 24 household items

Therefore,

opportunity cost of 1 outing = 1.71 household items

6 0
3 years ago
the role of government in real estate at the federal, state, and local level. Which has the most significant impact on real esta
dezoksy [38]

Answer:

Local government has the most influence on real estate markets. It affects the supply and cost of real estate through zoning and land use regulations, fees on new land development, and restrictive building codes.

5 0
3 years ago
Read 2 more answers
Kyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is $250,000. In its most recent
love history [14]

Answer:

1. 26%

2. YES

3. $410,000

4. $250,000

Explanation:

1. Return on Assets = Net Profits/ Total Assets = 65,000/250,000 = 26%

2. Return on Assets should be beyond satisfactory for Kyzera because its performance is better than that of the industry average which is 12%

3. Total expenses for Kyzera can be derived from the formula: Total Revenue - Total Expenses = Net Profit.

Therefore 475,000 - Total expenses = 65,000.

Total expenses = 475,000 - 65,000 = $410,000

4. The average total amount of liabilities plus equity can be derived from the balance sheet equation that states that TOTAL ASSETS = EQUITY+LIABILITIES.

Therefore liabilities plus equity = $250,000

8 0
3 years ago
Which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it d
Murljashka [212]

Answer:

Related diversification

Explanation:

Related diversification

As the name indicate related diversification is related to expansion of  business in the  same  field to which it is currently working. This can be explained by one example. If any corporation are in a business of making computer parts and the very same corporation expand their business by  making related articles like calculator, smart watch etc. These all are come in the related diversification.

4 0
3 years ago
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