Answer: This can be explained as follows.
Explanation: A particular ratio can demonstrate the position of a company. For evaluating the position and position of a company the analyst should first compare the company with the industry average. The comparison with industry will imply whether company is in a surviving position or not.
Industry average may not give suitable results therefore comparison with core competitors should also be done.
A company having current ratio of 2.67 shows that such company have a sound financial condition as they have more than double of current ratios for paying their current liabilities .
Answer:
C) to fall
Explanation:
The relative price of beef will fall since Argentina can produce 1 ton of beef at the same price of 10 boxes of tulips,while Venezuela can produce 1 ton of beef at the same price of 15 tons of tulips. So Venezuelan beef is 5 boxes of tulips more expensive than Argentina's. When they start to trade, Argentina will be able to sell beef to Venezuela at a cheaper price until the price of Venezuelan beef lowers to match the Argentinean price.
Answer: b. The premium reflecting the risk that unanticipated events will occur over the term of the security.
Explanation:
The Maturity Risk Premium refers to an additional rate of return that is put on a long term instrument such as a bond to cater for unanticipated events during the time that the bond is to be held.
For example, there is a risk that inflation rates could rise sharply.
This is why the Maturity Risk Premium is important. To ensure that returns are stable even if such events occur.
Answer:
Lower.
Explanation:
The capitalization rate is mainly used in real estate and is a measure of the rate of return on a property, based on the net operating income it is expected to generate.
Johnson in appraising two parcels of property, leased one to the government for use as a post office while the other parcel of property, is leased to a private owner for use as a hardware store. Having the knowledge that the parcels have recently started long-term leases. The capitalization rate of the post office property used by the government as compared to the capitalization rate of the hardware store property used by the private owner will be lower.
The capitalization rate of the post office property would be lower because, real-estate investors will not expect much returns on the investment as it's a less risky investment. The post office is less likely than a hardware store to run out of business or go bankrupt by virtue of being a governmental agency or public company.
Hence, the hardware store will need a higher capitalization rate in comparison with post office property.
