All categories

2 years ago

4. Human judgment and experience can play a role in the advent of stock market crash because

Business

1 answer:

notka56 [123]2 years ago

8 0

Answer:

Investors with an experience of financial crises are better at diversifying their portfolios

Explanation:

When an investor has experienced a financial crisis in the past, and decides to diversify his investment portfolio as a result, he is using both human judgment and experience to take the best decisions available to him.

Diversifying your investment porftolio is a good decision because it reduces risk (although it may also reduce profitability so there is a trade-off). Investors with past experience tend to spread their investments in order to reduce risk and avoid large losses. They do this because they see the possibility of a new financial crisis in the near future.

You might be interested in

A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a r

krok68 [10]

Answer:

B. total revenue will decrease.

Explanation:

The initial revenue for breakfast cereal is given by the product between the price of cereal (P) and the demanded quantity (D):

$R_1 = P*D$

After a 25% decrease in price and a 20% increase in demand, the new revenue will be:

$R_2 =(1-0.25) P*(1+0.20)D\\R_2 = 0.9P*D\\R_2=0.9R_1$

The new revenue is 90% of the original revenue; therefore, total revenue will decrease.

7 0

2 years ago

Pabon Corporation makes one product. Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively. The

AleksAgata [21]

Answer:

$555,750

Explanation:

First we need to calculate the units produced in the month of August.

We know that the opening inventory of finished goods is equal to 40% of that month's sale.

The Opening inventory of August will be: 11100 * 0.4 = 4440

Units produced in august relating to August sales will be 11100 - 4440 = 6660
Units produced in August relating to September's sales will be 12600 * 0.4 = 5040
Total units produced in August = 6660 + 5040 = 11700 units
labour hours required for August = 11700 * 2.5 = 29250 direct labor hours
So, Direct labor Cost = 29250 * 19 = 555750

7 0

2 years ago

29. Maxwell is trying to decide whether to accept a salary of $60,000 or a salary of $25,000 plus a bonus of 20% of net income a

Akimi4 [234]

Answer:

Maxwell world consider choice equal to $310000

Explanation:

given data

accept a salary = $60,000

salary = $25,000

bonus = 20% of net income

to find out

amount of income would be necessary so that Maxwell would consider

solution

we get here income by bonus that is express as

bonus = 2 ( income - bonus - salary ) ..............1

3500 = 2 ( income - ( 0.2 × 35000 ) - ( 0.2 × (75000 + 35000) )

solve it we get

income = $310000

so Maxwell world consider choice equal to $310000

3 0

2 years ago

A 12-cylinder heavy-duty diesel engine will have a guaranteed residual value of $1,000 in five years. Today (year 0) the equi

zavuch27 [327]

Answer:

$650

Explanation:

Guaranteed Residual Value = FV = $1,000

Interest rate = r = 9% = 0.09

Number of years = n = 5 years

Using Following formula we can calculate today's worth of the engine.

Residual value after 5 years = Today's value x ( 1 + rate of interest )^number of years

FV = PV x ( 1 + r )^n

$1,000 = PV x ( 1 + 0.09 )^5

PV = $1,000 / ( 1.09 )^5

PV = $649.93

PV = $650 (rounded off to the nearest whole number)

5 0

2 years ago

Four investors bought a real estate asset together and decided to divide the profits equally. Investor A invested $200,000; inve

Charra [1.4K]

Answer:

$150,000

Explanation:

If four investors bought a real estate asset together and decided to divide the profits equally.

Investor A invested $200,000;

investor B invested $500,000;

investor C invested $800,000;

investor D invested $500,000. If the net profit for the first year was $1,000,000, investor A receives $150,000 more than if the profits were divided in proportion to how much they invested.

If the profits were divided according to investment percentage he would have gotten 200,000 / (200,000 +500,000 + 800,000+500,000) x $1m = $100,000.

However if profits are shared equally he receives $1m / 4 investors = $250,000.

Therefore $250,000 - $100,000 = $150,000

4 0

2 years ago