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3 years ago

Which of the following statements is CORRECT?

1 answer:

3 0

Answer: C. Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period.

Explanation:

From the options given, the correct option is option C "Suppose the returns on two stocks are negatively correlated. One has a beta of 1.2 as determined in a regression analysis using data for the last 5 years, while the other has a beta of %u22120.6. The returns on the stock with the negative beta must have been negatively correlated with returns on most other stocks during that 5-year period".

Option A is wrong because when there is information that a particular stock will be strong in the future, one should not sell your high-beta stocks and buy low-beta stocks rather the low best stocks should be sold and high beta stocks should be bought.

Option B is wrong because during recession, collections' revenues, profits, and stock price tend to fall and not rise. During recession, there is decrease in economic growth, unemployment and other negative effects in the economy.

Option D and E are wrong as well as the reverse is the case in both situations. The correct option is C.

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Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch

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Answer:

14.2 years

Do not invest

yes

Explanation:

Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows

Cash flow each year = $12,000 - $2,000 = $10,000

Discounted cash flow in year 1 = 10,000 / 1.05 = 9.523.81

Discounted cash flow in year 2 = 10,000 / 1.05^2 = 9,070.29

Discounted cash flow in year 3 = 10,000 / 1.05^3 = 8,638.38

Discounted cash flow in year 4 = 10,000 / 1.05^4 = 8,227.02

Discounted cash flow in year 5 = 10,000 / 1.05^5 = 7,835.26

Discounted cash flow in year 6 = 10,000 / 1.05^6 = 7,462.15

Discounted cash flow in year 7 = 10,000 / 1.05^7 = 7,106.81

Discounted cash flow in year 8 = 10,000 / 1.05^8 = 6,768.39

Discounted cash flow in year 9 = 10,000 / 1.05^9 = 6,446.09

Discounted cash flow in year 10 = 10,000 / 1.05^10 = 6,139.13

Discounted cash flow in year 11 = 10,000 / 1.05^11 = 5846.79

Discounted cash flow in year 12 = 10,000 / 1.05^12 = 5568.37

Discounted cash flow in year 13 = 10,000 / 1.05^13 = 5303.21

Discounted cash flow in year 14 = 10,000 / 1.05^14 =5050.68

Discounted cash flow in year 15 = 10,000 / 1.05^15 = 4810.17

Discounted payback period = [-100,000 + ( discounted cash flows from year 1 to 14) ] + 1013.62/4810.17 = 14.2 years

The cash flows would turn positive between year 14 and 15

If the DPBP is 3 years, the project should not be accepted because the payback period is 14.2 years which is greater than 3 years

Bailey buy the gang punch based on DPBP because the amount invested is recouped with the useful life of the machine

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3 years ago

"Tourism sector has become a good source of earning foreign currency in Nepal"Justify this statement with examples

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Explanation:

Tourism has become one of the main income sources for many developing countries like Nepal. Nepal has great potential to become a top destination for tourists as the nation is famous for its snowcapped mountains, abundant flora and fauna, exciting trekking routes and rich cultural and religious diversity.

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If the labor force grows at a faster rate than the number employed, it means that

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Answer:

the number employed, the unemployment rate will rise.

Explanation:

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What are the four major categories of expenditure?

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The four major components that go into the calculation of the U.S. GDP, as used by the Bureau of Economic Analysis, U.S. Department of Commerce are:<span>Personal consumption expenditures.
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4 years ago

In a strong culture company,A. values and behavioral norms are like crabgrass—deeply rooted and hard to weed out.B. there is wid

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Answer:

C a company has more strategy flexibility because it can change its strategy and be confident that the culture will welcome the strategy changes and be an ally in implementing whatever changes are called for

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