You decide to purchase an equal number of shares of stocks of firms to

You decide to purchase an equal number of shares of stocks of firms to create a portfolio. If you wished to construct an index to track your portfolio performance your best match for your portfolio would be to construct a/an ______. A. value weighted index B. equal weighted index C. price weighted index D. bond price index

2 months ago

Solution 1

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2 months ago

Answer:

Price weighted index

Explanation:

A price weighted index is an index used in stocks where each company that is part of the index makes up a fraction of the total, and is proportional to its price per share.

Higher weight is given to sticks that have higher prices.

Rice weighted index is a good way to track track portfolio performance that best match for your portfolio.

📚 Related Questions

Question
You are the newly appointed sales manager of the Rock Record Company and have been charged with the task of increasing revenues. Your economics consultants have informed you that at present price and output levels, price elasticity of demand for your product is less than one. You should______________
Solution 1

Answer:

increase the price of our products or services.

Explanation:

When the price elasticity is less than 1 (inelastic), then an increase in the price of our products or services will result in a proportionally smaller decrease in the quantity demanded. Therefore, by increasing our prices, we can increase total revenue even if the quantity demanded decreases a little.

Question
Railroad companies controlled by J. P. Morgan sometimes issued watered stock, a practice that Question 11 options: a) kept investors happy but caused overcapitalization and debt for the railroads. b) was highly speculative and forced the railroads into bankruptcy. c) offered large investors first refusal when a company issued additional stock. d) kept the railroad companies from bankruptcy.
Solution 1

Answer:

A) kept investors happy but caused overcapitalization and debt for the railroads.

Explanation:

When a firm issued watered stock, it means that they are issuing the stock with an artificially high par value. Watered stocks were a type of fraud related to the sales of stocks with an absurd par value. You have to remember that back then, railroad companies were huge and extremely powerful, monopolies were common and information was scarce and generally manipulated. By issuing stocks with a very high par value investors were tricked into believing that the company was actually worth much more that its real value. Very few people dared to oppose the industry giants and most tried to earn money by using the same dirty tricks.

Question
The rate of interest agreed upon contractually charged by a lender or promised by a borrower is the​ ________ interest rate. A. effective B. continuous C. discounted D. nominal
Solution 1

Answer: The correct answer is d) NOMINAL

Explanation: Nominal interest rate is the interest rate before inflation is taken into account. Nominal interest rate can also be used to the advertised or stated interest rate on a loan, without taking into account any fees or compounding of interest.

It is the contractual interest rate charged by a lender or promised by the borrower.

Question
Samuel Jenkins made two investments; the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $11,000 on each. If Samuel is single and has taxable income of $40,000, what will be the amount of capital gains tax on each investment?
Solution 1

Answer:

short: 11,000 -->  1,320 income tax

long:  11,000 --> zero tax income

Explanation:

The capital gains are clasiffied as long.term gain once they were held for period of time of more than a year during the current holder.

Thus, the 13 month ago investment will be considered long term

while the other short term

the rate for short term is 12% at Samuel income bracket

while the long.term capital gain will not be taxed,

short term:

11,000 x 12% = 1.320‬

Question
The price elasticity of supply measures how responsive a. sellers are to a change in price. b. sellers are to a change in buyers' income. c. buyers are to a change in production costs. d. equilibrium price is to a change in supply.
Solution 1

Answer:

a. sellers are to a change in price    

Explanation:

The price elasticity of supply measures the percentage change in quantity supplied with the percentage change in price

In mathematically,

Price elasticity of supply = (Percentage change in quantity supplied ÷  percentage change in price)

It shows a direct relationship between the quantity supplied and the price.

Question
You are comparing two annuities that offer regular payments of $2,500 for five years and pay .75 percent interest per month. You will purchase one of these today with a single lump sum payment. Annuity A will pay you monthly, starting today, while annuity B will pay monthly, starting one month from today. Which one of the following statements is correct concerning these two annuities? Multiple Choice a.These annuities have equal present values but unequal future values. b.These two annuities have both equal present and equal future values. c.Annuity B is an annuity due. d.Annuity A has a smaller future value than annuity B. e.Annuity B has a smaller present value than annuity A.
Solution 1

Answer:

E) Annuity B has a smaller present value than annuity A.

Explanation:

The main premise in finances is that the value of money increases in time, e.g. one dollar today is worth more than one dollar tomorrow.

In this case, annuity A is an annuity due (payment is made at the beginning of each period). An annuity due that has the same payments and the same rates, will always have a higher present value than an ordinary annuity.

Question
You are considering renting a city apartment with​ 1,000 square feet for ​$1 comma 300 per month. The monthly rent on a​ larger, 1,500-square-foot city apartment is ​$1 comma 850. The marginal cost of renting an apartment with 500 additional square feet is?
Solution 1

Answer:

$1.10 per square foot per month

Explanation:

the marginal cost of renting an apartment with 500 additional square feet = $1,850 - $1,300 = $550 or $1.10 per square foot per month.

The marginal cost of anything is the cost of purchasing (or leasing or producing) one extra unit of output or product.  This is why the answer must be expressed in the cost of an extra unit, not 500 extra units.

Question
With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 6%. But if the rate of inflation was expected to be 4%, the bank would most likely charge the firm an annual interest rate of rev:________________
Solution 1

Answer:

The nominal interest rate which the bank will offer is of 10.24%

Explanation:

according to Irwin formula the bank will charge a nominal rate that ensures a real rate of 6% thus:

\frac{1+r_n}{1+ \theta} -1 =r_e

(1+r_e)(1+ \theta) -1 = r_n

1.06*1.04-1 = 0.1024 = 10.24%

Question
Why do all shareholders agree on the same goal for the financial​ manager? ​(Select all the choices that​ apply.) A. All of the decisions by the financial manager are made within the context of the overriding goal of financial managementlong dash—to maximize the wealth of the​ owners, the stockholders. B. All of the decisions by the financial manager are made within the context of the overriding goal of financial managementlong dash—to maximize the wealth of the corporation. C. The stockholders have invested in the​ corporation, putting their money at risk to become the managers of the corporation. D. The stockholders have invested in the​ corporation, putting their money at risk to become the owners of the corporation.
Solution 1

It can be noted that shareholders agree on same goals because:

  • A. All of the decisions by the financial manager are made within the context of the overriding goal of financial management to maximize the wealth of the owners, the stockholders.

  • D. The stockholders have invested in the corporation, putting their money at risk to become the owners of the corporation.

It should be noted that shareholders agree on the same goal for the finance manager.

In this case, the main goal is to maximize shareholders wealth. Shareholders put their money at risk to become owner of the corporation .

Therefore, all decisions by the financial manager are made within the context of the overriding goal of financial management to maximize the wealth of the owners, the stockholders.

Learn more about shareholders on:

brainly.com/question/25847981

Solution 2

Answer:

A. All of the decisions by the financial manager are made within the context of the overriding goal of financial management to maximize the wealth of the​ owners, the stockholders

D. The stockholders have invested in the​ corporation, putting their money at risk to become the owners of the corporation.

Explanation:

Shareholders agree on the same goal for the finance manager . The goal is to maximize shareholders wealth by adding values of the organisation in the form of market capitalization of the company or organisation. They put their money at risk to become owner of the corporation . They employ managers to manage the affairs of the business so that value of the organisation is maximized.

Question
You are evaluating the balance sheet for Goodman's Bees Corporation. From the balance sheet you find the following balances: cash and marketable securities = $560,000, accounts receivable = $2,000,000, inventory = $2,500,000, accrued wages and taxes = $610,000, accounts payable = $910,000, and notes payable = $710,000. Calculate Goodman's Bees' net working capital.
Solution 1

Answer:

$2,830,000

Explanation:

Net working capital is calculating by subtracting current liabilities from current assets

  • current assets = cash and marketable securities + accounts receivable + inventories = $560,000 + $2,000,000 + $2,500,000 = $5,060,000
  • current liabilities = accrued wages and taxes + accounts payable + notes payable = $610,000 + $910,000 + $710,000 = $2,230,000

net working capital = $5,060,000 - $2,230,000 = $2,830,000