Which of the following is not an assumption of the Capital Market Theory?
a. All investors are Markowitz efficient investors.
b. All investors have homogeneous expectations.
c. There are no taxes or transaction costs in buying or selling assets.
d. All investments are indivisible so it is impossible to buy or sell fractional shares.
e. All investors have the same one period time horizon.
D
You might also like to view...
In accounting for inventory, the assumed cost flow need not match the physical goods flow
Indicate whether the statement is true or false
Carmichael Cleaners needs a new steam finishing machine that costs $100,000. The company is evaluating whether it should lease or purchase the machine. The equipment falls into the MACRS 3-year class, and it would be used for 3 years and then sold, because the firm plans to move to a new facility at that time. The estimated value of the equipment after 3 years is $30,000. A maintenance contract on the equipment would cost $3,000 per year, payable at the beginning of each year. Alternatively, the firm could lease the equipment for 3 years for a lease payment of $29,000 per year, payable at the beginning of each year. The lease would include maintenance. Due to special circumstances, the firm is in the 20% tax bracket, and it could obtain a 3-year simple interest loan, interest payable at
the end of the year, to purchase the equipment at a before-tax cost of 10%. If there is a positive Net Advantage to Leasing the firm will lease the equipment. Otherwise, it will buy it. What is the NAL? (Note: Assume MACRS rates for Years 1 to 4 are 0.3333, 0.4445, 0.1481, and 0.0741.) A. $5,734 B. $6,023 C. $6,324 D. $6,640 E. $6,972
A network extension is a unique name that identifies an individual's or company's website
Indicate whether the statement is true or false
Allyson Brown is trying to develop a promotional mix for her firm's new product, a sophisticated modular sunporch designed for use all year. She reasons that because her product is complex and carries high financial risks for consumers, the mix should concentrate on personal selling.
Answer the following statement true (T) or false (F)