GDP can be calculated by summing _____. rev: 04_09_2018 Multiple Choice consumption, investment, government purchases, and net exports consumption, investment, government purchases, and imports consumption, investment, wages, and rents consumption, investment, government purchases, exports, and imports

Answers

Answer 1

Answer:

consumption, investment, government purchases, and net exports

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

Imports is subtracted from GDP and not added


Related Questions

Martin Shkreli, former CEO of pharmaceutical company Retrophin,, has many traits of a leader. He is very intelligent, brash, extroverted, and driven to succeed. But he lacks the key trait to keep the confidence of others, which eventually led to a fraud conviction. He lacks

Answers

Answer:

Integrity.

Explanation:

In this scenario, Martin Shkreli, former CEO of pharmaceutical company Retrophin, has many traits of a leader. He is very intelligent, brash, extroverted, and driven to succeed. But he lacks the key trait to keep the confidence of others, which eventually led to a fraud conviction. Hence, he lacks integrity.

Integrity can be defined as an attribute which involves being honest, sincere, upright, adherence to strong moral and ethical principles or morally based values.

In this context, Martin Shkreli was eventually convicted for fraud because he lacked the quality of being trustworthy, truthful, honest and keeping the confidence of others.

Eliminating the queue of work dramatically quickens the time it takes apart to flow through the system. What are the disadvantages of removing those queues?

Answers

Answer:

quality may sufferexcess output may

Explanation:

Note that quality does not necessarily come quickly, and so even though eliminating the queue of work dramatically quickens the time it takes apart to flow through the system, it may result in excess output and poor quality.

Take for a stadium that has no entrance way (or doors) that is hosting an event, evidently it is less likely there will be a queue, as everyone would be rushing in quickly, but with possible consequences of overpopulation etc.

A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability. The manager believes there is a 75 percent chance the recession will end in six months and profits will return to $400 million. However, there is a 25 percent chance the recession will not end in six months, resulting in a $5 million loss. The expected profits over the next six months are:

Answers

Answer:

Expected profit = $298.75 million

Explanation:

To calculate the expected return or expected profits, we will simply multiply the probability of each event by the return expected in that event and take a sum the answers. Thus, the expected profit can be calculated as follows,

Expected profit = Probability of recession ending * Profit if recession ends + Probability of recession not ending * profit or loss if recession does not end

Expected profit = 0.75 * 400  +  0.25 * -5

Expected profit = $298.75 million

g Mason Company paid its annual property taxes of $240,000 on February 15, 20X9. Mason also anticipates that its annual repairs expense for 20X9 will be $1,200,000. This amount is usually incurred and paid in July and August when operations are shut down so that machinery and equipment can be repaired. What amount should Mason deduct for property taxes and repairs in each quarter for 20X9?

Answers

Answer:

$360,000

Explanation:

The total cost would be estimated as the expense anticipated plus the property taxes paid previously.

Now

Total Cost = $240,000 Property Taxes paid      +     $1,200,000 Property repairs anticipated

= $1,440,000

Now we will distribute the annual cost over the four quarters which mean we will divide the total annual cost by 4.

Quarterly Expenses = $1,440,000 / 4     = $360,000

Self minus Defense ​Schools, Inc. is authorized to issue​ 200,000 shares of ​$2 par common stock. The company issued 73,000 shares at $ 5 per share. When the market price of common stock was $ 7 per​ share, Self minus Defense Schools declared and distributed a 14​% stock dividend.​ Later, Self minus Defense Schools declared and paid a $ 0.70 per share cash dividend.


Required:

a. Journalize the declaration and the distribution of the stock dividend.

b. Journalize the declaration and the payment of the cash dividend.

Answers

Answer: Please see answer in explanation column

Explanation:

Number of outstanding shares =73,000

Stock Dividend declared %  14%

Market value per share  $7

a) journal entry to record  the declaration of stock dividend

Account                                             Debit                         Credit

Stock dividend                               $71,540

Commo9n stock divo9dend redistributable                  $20,440

Paid in capital in excess of par  

($71,540 - $20,440)                                                            $51,100    

Calculations

Stock dividend = 73,000 x 14% x $7=$71,540

Common stock dividend redistributable =73,000 X 14% X $2=$20,440

b) journal entry to record  the distribution of stock dividend

Account                                                         Debit             Credit

Common stock dividend redistributable    $20,440                

Common stock                                                                 $20,440

Calculation= Common stock dividend redistributable =73,000 X 14% X $2=$20,440

c) journal entry to record the declaration of cash dividend

Account                                             Debit                         Credit

    Cash dividend                              $58,254

Dividend payable - common stock                                  $58,254              

Calculations

Cash dividend= Numberof shares outstanding×Cash dividend per share

=[73, 000 shares+(73,000 shares×14%)]×$0.70 each

=[73,000 shares+ 10,220 shares]×$0.70 each

=83,220 shares×$0.70 each

= $58,254

​  

d)journal entry to record the payment of cash dividend

Account                                                Debit                         Credit

Dividend payable - common stock   $58,254    

     Cash dividend                                                              $58,254    

At the beginning of June, Bezco Toy Company budgeted 5,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $50,000 Direct labor 36,000 Total $86,000 The standard materials price is $4.00 per pound. The standard direct labor rate is $18.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $49,600 Actual direct labor 34,020 Total $83,620There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Bezco Toy Company actually produced 4,850 units during June.Required:Determine the direct materials quantity and direct labor time variances.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Standard quantity:

Direct materials (pounds)= 50,000/4= 12,500 pounds

Direct materials (pounds)= 12,500/5,000= 2.5 pounds per unit

Direct labor (hours)= 36,000/18= 2,000 hours

Direct labor (hours)= 2,000/5,000= 0.4 hours

Actual quantity:

Actual direct materials= (49,600/4)= 9,920 pounds

Actual direct labor= 34,020/18= 1,890 hours

Production= 4,850

To calculate the direct labor quantity variance, we need to use the following formula:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Standard quantity= 2.5*4,850= 12,125

Direct material quantity variance= (12,125 - 9,920)*4

Direct material quantity variance= $8,820 favorable

To calculate the direct labor time variance, we need to use the following formula:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Standard quantity= 0.4*4,850= 1,940

Direct labor time (efficiency) variance= (1,940 - 1,890)*18

Direct labor time (efficiency) variance= $900 favorable

​Group-oriented negotiators are concerned about their own interests above all else. Is this statement true or​ false?

Answers

Answer: False

Explanation:

Negotiation is a dialogue taht takes place between two to more individuals so that a common stand can be reached on a subject.

​Group-oriented negotiators are concerned about the interest of their teams or groups and not their own interests. Therefore, the above question is wrong.

NIKE, Inc., is the best-known sports shoe, apparel, and equipment company in the world because of its association with athletes such as LeBron James, Roger Federer, and Madison Keys. Some of the items included in its recent statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F) section of the statement or use (NA) if the item does not appear on the statement.1. Additions to long-term debt.2. Depreciation3. Additions to equipment.4. Increase (decrease) in notes payable. (The amount is owed to financial institutions.)5. (Increase) decrease in other current assets6. Cash received from disposal of equipment.7. Reductions in long-term debt.8. Issuance of stock.9. (Increase) decrease in inventory.10. Net income

Answers

Answer and Explanation:

The statement of cash flow involves 3 kinds of activities mentioned below:

1. Operating activities: Many transactions are based that affect the working capital following net income. It would increase the growth in current assets and a decrease in current liabilities, whereas adding the decrease in current properties and an increase in current liabilities.

This should mitigate any work capital shifts. Furthermore, the cost of depreciation is attributed to the net income and the loss on the sale of assets is attributed while the benefit on the sale of assets is deducted

2. Investing: it monitors activities involving the acquisition and selling of long-term assets. The purchase is cash outflow while the selling is cash inflow

3. Financing activities: it monitors activities that impact on the shareholders' long-term debt and equity balance. Share issue is cash inflow whereas cash outflows are redemption and dividend.

Therefore based on the above explanation, the classification is as follows

1 Financing Activity

2. Operating activity

3 Investing activity

4  Financing Activity

5  Operating activity

6 Investing activity

7  Financing Activity

8  Financing Activity

9  Operating activity

10  Operating activity

Domingo Corporation uses the weighted...
Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,300 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent Complete
Materials costs $7,400 50%
Conversion costs $3,600 20%
A total of 8,700 units were started and 8,000 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $160,600
Conversion costs $122,300
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. How many units are in ending work in process inventory in the first processing department at the end of the month?
a. 700.
b. 1,700.
c. 6.400.
d. 2,700.

Answers

Answer:

3,000 units

Explanation:

Calculation for How many units are in ending work in process inventory

Using this formula

Ending work in process units =Beginning work in process units + Units started into production - Transferred to the second processing department units

Let plug in the formula

Ending work in process units= 2,300 units + 8,700 units - 8,000 units

Ending work in process units= 3,000 units

Therefore 3,000 units are in the ending work in process inventory in the first processing department at the end of the month.

conduct an internet search to locate a copy of the sarbanes oxley act of 2002. read and sumarize the requirements of section 302 of the act. Discuss how those provisions would or would not have deterred the actions of scott sullivan, cfo at worldcom

Answers

Answer:

Sarbanes Oxley act of 2002 is law of United States passed on 30th July 2002. This act helps to protect investor from fraudulent financial reporting by organizations. The act requires all companies to include report on their internal controls in the Financial reports.  

Explanation:

The section 302 of the act directs the Securities and Exchange Commission to adopt rules to adopt financial officer who certify company's annual, interim and quarterly financial reports. The main purpose is to minimize any chance of intentional frauds or deceive investors. The officers review financial reports of the company and certify that these reports does not cover any significant wrong statement, Financial statements of the company are fairly presented based on the knowledge of the officer. He is also responsible to review the report of internal controls of the company to ensure that there is no weakness in controls which can lead to frauds in the organization.

Consider the economies of Gobbledigook and Hermes, both of which produce agricultural products using only land and labor. The following tables show the supply of land, population size, and real GDP for these two economies from 2015 to 2018.
Calculate real GDP per capita for the two economies, and complete the last column of the following two tables.
Gobbledigook
Year Land Population Real GDP Real GDP per Capita
(Acres)
2011 20,000 500 $3,500
2012 20,000 1,000 $8,000
2013 20,000 1,500 $13,500
2014 20,000 2,000 $20,000
Blahnik
Year Land Population Real GDP Real GDP per Capitl
(Acres)
2011 20,000 1,000 $11,000
2012 20,000 2,000 $20,000
2013 20,000 3,000 $27,000
2014 20,000 4,000 $32,000

Answers

Answer:

Kindly check explanation and attached picture

Explanation:

Real GDP per capita = (Real GDP / Population)

Gobbledigook Real GDP per capita:

2011: ($3500 / 500) = $7

2012: ($8000 / 1000) = $8

2013: ($13,500 / 1,500) = $9

2014: ($20,000 / 2000) = $10

BLAHNIK Real GDP per Capita:

2011: ($11,000 / 1000) = $11

2012: ($20,000/2000) = $10

2013: ($27,000 / 3000) = $9

2014: ($32,000 / 4000) = $8

A newer form of performance appraisal is called the ___________ because it encourages feedback from all around the employee including those who report to him/her.

Answers

Answer:

360-degree review

Explanation:

A 360-degree review is a process in which a company gathers information about the performance and behavior of an employee from different sources that can be coworkers, supervisors and subordinates but also from people outside the company that have to interact with the person like suppliers to evaluate the employee and help him/her to develop skills. According to this, the answer is that a newer form of performance appraisal is called the 360-degree review because it encourages feedback from all around the employee including those who report to him/her as in this form of evaluation the company obtains feedback about the employee's performance from different sources.

The term used to describe the degree to which tasks in an organization are subdivided into separate jobs is called ________.

Answers

Answer:

work specialization

Explanation:

The term being described is known as work specialization. This term, also known as division of labor, is mainly used by companies in order to divide a large job position into smaller, single tasks that can be completed by one individual. The individual that is given such a task is trained thoroughly in order for them to become a specialist in that task and output more precise workloads.

Mangum Co. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:
Direct Labor: $25/unit
Direct Materials: $80/unit
Variable Overhead: $15/unit
Traceable Fixed Costs: $62,000
Common Fixed Costs: $100,000
Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. By how much did the department margin increase or decrease in October?
a. $100,000 decrease
b. $118,000 increase
c. $18,000 increase
d. $82,000 decrease

Answers

Answer: c. $18,000 increase

Explanation:

Department margin was $100,000 in September.

October Margin = Sales - Variable Costs - Traceable Fixed Costs

= (2,000 *( 210 - 25 - 80 - 15) ) - 62,000

= (2,000 * 90) - 62,000

= $118,000

= October Margin - September Margin

= 118,000 - 100,000

= $18,000 increase

An investor has a 25% chance of making $1000 if the stock market is good, and a 50% chance of making $600 if the market is average. The investor expects to lose $800 if the market is bad. The expected monetary value is:

Answers

Answer:  $350

Explanation:

The expected monetary value is the weighted average of the outcomes.

25% - Stock Market is good

50% - Stock Market is average

25% - Stock market is bad

Expected Monetary Value = ( 0.25 * 1,000) + (0.5* 600) + ( 0.25 * -800)

= 250 + 300 - 200

= $350

On July 1, 20X1, James and Short formed a partnership. James contributed cash. Short, previously a sole proprietor, contributed property other than cash, including realty subject to a mortgage, which the partnership assumed. Short’s capital account on July 1, 20X1, should be recorded at

Answers

Answer:

James and Short LLC

Short's capital account on July 1, 20X1 should be recorded at the fair value of contributed property minus the mortgage liability, which the partnership assumed.

Explanation:

The fair value of contributed property is the current market value of the contributed property by Short.  It is the market value that will determine how the contributed property can be valued.  The market value assumes that the contributed property is being sold in pieces and not as a whole.  This is why the value is considered a fair basis for recognizing the capital contribution of Short into the partnership.

Consider a university that purchases replacement chairs for its classrooms. The purchasing manager knows that the annual demand for replacement chairs is 500. The pricing schedule is as follows: Use the following Excel solution to this quantity discount problem with constant carrying cost. Carrying cost = $ 15 Ordering cost = $ 200 Annual Demand = 500
Quantity Price Q Discount Q Total Cost
100 $130 115.47 115.47 $ 66,732.05
200 $122 115.47 200.00 $ 63,000.00
500 $120 115.47 500.00 $ 63,950.00
What is the inventory ordering cost using the economic order quantity?
A. $1,000
B. $866
C. $500
D. $200

Answers

Answer:

b. $866

Explanation:

Annual demand from the question = D = $500

the ordering cost = S = $200

then the cost of carrying H = $15

we have to calculate the economic order quantity

= sqr(2*D*S)/H

= sqr(2 x 500 x 200)/25

= sqr(13333.3333)

this equals 115.469

which is approximately 115.5

next we have to calculate inventory ordering cost

= (D * S)/EOQ

= 200 *500/115.5

= 865.5

When approximated becomes $866

The inventory ordering cost using the economic order quantity is: B. $866.

First step is to calculate the Economic order quantity

Economic order quantity =√(2×D×S)/H

Where:

D=Annual demand=$500

S=Ordering cost=$200

H=Holding cost =$15

Let plug in the formula

Economic order quantity =(2 x 500 x 200)/15

Economic order quantity =√200,000/15

Economic order quantity =√13333.3333

Economic order quantity =115.46

Economic order quantity = 115.5 (Approximately)

Second step is to calculate the inventory ordering cost using this formula

Inventory ordering cost= (Annual demand× Ordering cost )/Economic order quantity  

Let plug in the formula

Inventory ordering cost= (200×500)/115.5

Inventory ordering cost=100,000/115.5

Inventory ordering cost=$865.8

Inventory ordering cost=$866 (Approximately)

Inconclusion the inventory ordering cost using the economic order quantity is: B. $866.

Learn more here:https://brainly.com/question/14498670

TB MC Qu. 9-371 Irving Corporation makes a product with ... Irving Corporation makes a product with the following standards for direct labor and variable overhead: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct labor 0.2 hours $ 15.00 per hour $ 3.00 Variable overhead 0.2 hours $ 5.10 per hour $ 1.02 In November the company's budgeted production was 5,400 units, but the actual production was 5,200 units. The company used 1,660 direct labor-hours to produce this output. The actual variable overhead cost was $7,802. The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for November is:

Answers

Answer:

Variable manufacturing overhead rate variance= $664 favorable

Explanation:

Giving the following information:

Variable overhead 0.2 hours $ 5.10 per hour

The company used 1,660 direct labor-hours to produce this output. The actual variable overhead cost was $7,802.

To calculate the variable overhead rate variance, we need to use the following formula:

Variable manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity

Actual rate= 7,802/1,660= $4.7

Variable manufacturing overhead rate variance= (5.1 - 4.7)*1,660

Variable manufacturing overhead rate variance= $664 favorable

Explain the 3 primary ingredients of Just in Time, and how it can be used in a transportation company.

Answers

Explanation:

Just in time can be understood as a strategic system that fundamentally seeks to achieve continuous improvement of processes by reducing costs and waste.

Its principles are total quality management, respect for people and just in time manufacturing.

Just in time can be understood as a strategic system that fundamentally seeks to achieve continuous improvement of processes by reducing costs and waste.

Its principles are total quality management, respect for people and just in time manufacturing.

In this strategy, the focus is that all activities must be carried out at the exact time, that is, eliminating any waste such as raw material, stock, production, etc., which eliminates costs and reduces failures, increasing all processes organizational changes that guarantee an increase in total quality.

The principle of respect for people is also given by the flexibility that this system gives to employees, by the management of total quality that gives a more dynamic work that guarantees the greatest engagement of employees.

In a transport company, the Just in time system would be effective if it were integrated into all operational areas of the company, involving all work hierarchies.

It would also be essential to have changes in internal policies to ensure that processes are improved in order to eliminate waste, which would require adequate training of employees, the implementation of control technologies, the adoption of a more effective and faster value chain , etc., in order to eliminate waste and increase total quality.

February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $112,000. The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2018. Costs incurred during this period were: Item Amount Demolition dilapidated building $2,000 Architect Fees $11,250 Legal Fees - for title search $1,450 Interest During Active Construction Period $5,025 Real estate transfer tax $975 Construction Costs $605,000 Using this information, how much should be recorded as the cost of the land?

Answers

Answer:

The cost of the land should be recorded as $108,350

Explanation:

Land cost =                                     $112,000

Demolition dilapidated building = $2,200

Legal fees - title search =               $1,450

Cost of land = Land cost - Demolition dilapidated building - Legal fees - title search

Cost of land = $112,000 - $2,200 - $1,450

Cost of land = $108,350

Two investment advisors are comparing performance. Advisor A averaged a 20% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the period was 13%, which advisor was the better stock picker?

Answers

Answer:

Advisor A

Explanation:

t bill rate = 0.05

market rate = 0.13

the beta of the market is always 1

the rate of return= 0.05 + (0.13 - 0.05) x 1

= 0.13

which is 13%

this is for advisor A.

with a return of 20% and 1.5 beta

0.05 + ( 0.20 - 0.05) x 1.5

= 27.5% for advisor b

when the return is 15% and beta is 1.2

0.05 + (0.15 - 0.05) x 1.2

= 17%

Therefore advisor a is better

Suppose you observe the following situation: Security Beta Expected Return A 1.16 .1137 B .92 .0984 Assume these securities are correctly priced. Based on the CAPM, what is the return on the market

Answers

Answer: 10.35%

Explanation:

The Capital Asset Pricing Model is used to calculate the expected return of a security with the expression

Expected return = Risk free rate + Beta ( Market return - risk free rate)

( Market return - risk free rate) is also known as the market premium and can be calculated by;

= [tex]\frac{Expected return on A - Expected return on B}{Beta for A - Beta for B}[/tex]

= [tex]\frac{0.1137 - 0.0934}{1.16 - 0.92}[/tex]

= 0.0153/0.24

= 6.375%

= 6.38%

Expected return A = Risk free rate + Beta A ( Market return - risk free rate)

0.1137 = Risk free rate + 1.16 (6.38%)

Risk free rate = 0.1137 - 1.16(6.38%)

Risk free rate = 3.97%

Market Expected return = Market Risk Premium + risk free rate

= 6.38% + 3.97%

= 10.35%

A share of stock is now selling for $120. It will pay a dividend of $10 per share at the end of the year. Its beta is 1. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 6% and the expected rate of return on the market is 18%. (Round your answer to 2 decimal places.)

Answers

Answer:

P1 = 131.6566627 rounded off to $131.66

Explanation:

To calculate the price of the stock at the end of the year or P1, we first need to determine the required rate of return on the stock and the growth rate in dividends.

The required rate of return can be found using the CAPM equation. The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate rM is the return on market

r = 0.06 + 1 * (0.18 - 0.06)

r = 0.18 or 18%

Now we assume that the stock is a constant growth stock which means that the growth in dividends is expected to be constant throughout. The price of such a stock is found using the constant growth model of DDM. The formula for price today under the constant growth model is,

P0 = D1 / (r - g)

Where,

P0 is price today D1 is expected dividend for the next period g is the growth rate in dividends

Plugging in the available variables, g is,

120 = 10 / (0.18 - g)

120* (0.18 - g) = 10

21.6 - 120g = 10

g = (10 - 21.6) / -120

g = 0.096667 or 9.6667% rounded off to 9.67%

So to calculate the price at the end of the year or P1, we will use D2.

P1 = 10 * (1+0.0967) / (0.18 - 0.0967)

P1 = 131.6566627 rounded off to $131.66

Company FM2 must pay 100,000 in 4 years. In order to fully immunize from changes in interest rate, the company invests in a 3 year zero coupon bond that matures for 45,000 and a 5 year zero coupon bond that matures for X. The actuary for Company FM2 determined that their portfolio fully immunized their ability to meet their obligations at the current interest rate i. Calculate i.

Answers

Answer:

5. 11.1%

Explanation:

the options for this question are missing:

5%7.8%10%10.5%11.1%

I prepared the following equation:

$100,000 = $45,000(1 + i)³ + x(1 + i)⁵

There is something that we must remember about zero coupon bonds, and that is that they are sold in thousands. This equation is complex, but there is an easier way to solve it. We can plug in the options to determine which % will result in a possible answer.

The answer is 11.1%, since the other options resulted in numbers which are not even close to a thousand.

$100,000 = $45,000(1.111)³ + x(1.111)⁵

$100,000 = $61,709.88 + 1.2763x

$38,290.12 = 1.2763x

x = $38,290.12 / 1.2763 = $30,000

Gretta's portfolio consists of $700,000 invested in a stock that has a beta of 1.2 and $300,000 invested in a stock that has a beta of 0.8. The risk-free rate is 6% and the market risk premium is 5%. Which of the following statements is CORRECT?

a. The required return on the market is 10%.
b. The portfolio's required return is less than 11%.
c. If the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than 2%.
d. If the market risk premium remains unchanged but expected inflation increases by 2%, Gretta's portfolio's required return will increase by more than 2%.
e. If the stock market is efficient, Gretta's portfolio's expected return should equal.

Answers

Answer: c. If the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than 2%.

Explanation:

To prove the above option, the Capital Asset Pricing Model can be used.

Required Return = Risk free rate + portfolio beta(market premium)

Portfolio Beta

This the weighted average of the individual betas.

Total portfolio value = 700,000 + 300,000 = $1,000,000

= ( 1.2 * 700,000/1,000,000) + ( 0.8 * 300,000/1,000,000)

= 0.84 + 0.24

= 1.08

Required return = 6% + 1.08 ( 5%)

= 6% + 5.4%

= 11.4%

Assuming risk-free rate remains unchanged but the market risk premium increases by 2%.

Required return = 6% + 1.08 ( 5% + 2%)

= 6% + 7.56%

= 13.56%

The change in required return

= (13.56% - 11.4%)/11.4%

= 18.9%

Proving that if the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than 2%.

The date the directors vote to pay a dividend is called the: Multiple Choice Date of declaration. Date of record.

Answers

Answer: Date of declaration

Explanation:

The declaration date is also known as announcement date. The date of declaration is the date when the board of directors announces when the next dividend will be paid.

It should be noted that the statement consist of the size of the dividend, date of the previous dividend and also the next dividend payment date.

After the initial offering, the bonds are trading in the secondary market at 105, while the stock is trading at $10. Which statements are TRUE?

Answers

Answer:

B I and IV

Explanation:

Each bond could be transformed into common stock at $10.50 par value. So the bond should be equivalent to the 95 shares that comes from

= $1,000 ÷ $10.50 per share

= 95 shares

Currently price of the bond is $1,050

Now each share price is

= $1,050 ÷ 95 shares

= $11.05

As the common stock is traded at $10 that represents the stock is less than parity and therefore there is no means to transform the shares

hence, B option is correct

Consider the following scenario analysis:
Rate of Return
Scenario Probability Stocks Bonds
Recession 0.20 -5 % 14 %
Normal economy 0.60 15 8
Boom 0.20 25 4
Assume a portfolio with weights of .60 in stocks and .40 in bonds.
a. What is the rate of return on the portfolio in each scenario? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
b. What are the expected rate of return and standard deviation of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Answers

Answer:

a. Rate of Return on the portfolio in each scenario:

Scenario Analysis:

Rate of Return

Scenario                Probability    Stocks     Bonds      Return of Return

Recession                  0.20         -5 %           14 %

= 0.20((-5% x 60%) + (14% x 40%)) = 0.0052 =               0.5%

Normal economy      0.60         15                8

= 0.60((15% x 60%) + (8% x 40%)) =  0.0732 =                7.3%              

Boom                         0.20        25               4

= 0.20((25% x 60%) + (4% x 40%) = 0.0332 =                 3.3%

Weights                     1.00          0.60          0.40

b. Expected rate of return =

Recession =                      0.0052

Normal economy =           0.0732

Boom =                             0.0332

Total expected returns = 0.1116 = 11.2%

Mean = 3.72% (11.2%/3)

Variance = 0.001168

Standard Deviation = 0.034 = 0.03

Explanation:

a) Data:

Scenario Analysis:

Rate of Return

Scenario                Probability    Stocks     Bonds

Recession                  0.20         -5 %           14 %

Normal economy      0.60         15                8

Boom                         0.20        25               4

Weights                     1.00          0.60          0.40

b) The rate of return for each portfolio is derived by weighing the securities, adding the resultant figures and applying the scenario probability.  The expected rate of return is the addition of the returns of all the portfolio under the three scenarios.  The step for obtaining the standard deviation is to calculate the mean, the variance, and getting the square root of the variance.

The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 2200 units, the actual direct labor cost was $65600 for 4100 direct labor hours worked, the total direct labor variance is

Answers

Answer:

400 favorable

Explanation:

The computation of total direct labor variance is presented below:-

Total direct labor variance = (Standard rate - Standard hours) × (Actual rate - Actual hours)

= ($15 × (2 × 2,200)) - $65,600

= ($15 × 4,400) - $65,600

= $66,000 - $65,600

= 400 favorable

Therefore for determining the total direct labor variance we simply applied the above formula.

7. Ms. House utilizes a strategy of "Check 1 – 2- 3". Why does she do this? How do you think this was initially taught?

Answers

Explanation:

To get her student's attention. Remember, the check 1 2 3 strategy allows teachers to get an inside into the students understanding.

However, in this scenario, Ms. House uses the strategy to lower her student's voices, so as to get their attention. She likely started using this strategy at the start of the school year and kept doing it.

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