Answer: Buying $200 stock in AT&T is an example of investment. As in this case the persons income exceeds his consumption and he buys new capital.
Borrowing $1000 from a bank to buy a car to use in business is also an investment as in this case buying a car is like investing in a cash flow producing asset, as the car will be an asset which will help earn money from the pizza business.
Explanation:
Roommate depositing $100 is an example of saving and not investing.
Taking out a mortgage and buying a house is an example of consumption and not investment.
Burn it! (Lol IDK if this question was serious)
In this item, we let the number of tickets sold to the adults as x. With this, we can let the number of tickets sold to students with y.
In this item, we are given that the sum of the number of students and adults is equal to 600. Further, we are also given that the difference is 150. The system of linear equation that would allow us to solve this item is,
x + y = 600
x - y = 150
Adding up the two equations will give us,
2x = 750
Dividing by 2,
x = 375
Substituting this value to the first equation,
375 + y = 600
y = 225
Therefore, there are 375 and 225 number of tickets sold to adults and students, respectively.
The increase in stock risk has lowered its value by 16.09%.
<h3>What does market price mean?</h3>
- The price at which a good or service can currently be bought or sold is known as the market price.
- The forces of supply and demand determine the market price of a good or service; the price at which the quantity supplied and demanded are equal is the market price.
<h3>What is current price and market price?</h3>
- Market value is another name for the current price. It is the last traded price for a share of stock or any other security.
According to the question:
- If the security's correlation coefficient with the market portfolio doubles (with all other variables such as variances unchanged), then beta, and therefore the risk premium, will also double. The current risk premium is: 13% - 5% = 8%
The new risk premium would be 16%, and the new discount rate for the security would be: 16% + 5% = 21%
If the stock pays a constant perpetual dividend, then we know from the original data that the dividend (D) must satisfy the equation for the present value of a perpetuity:
Price = Dividend/Discount rate.
26 = D/0.13.
D =26 x 0.13.
D = $3.38.
At the new discount rate of 21%, the stock would be worth:
$3.38/0.21.
= $16.09.
The increase in stock risk has lowered its value by 16.09%.
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