How would the Security Market Line be affected, other things held constant, if the expected inflation rate decreases and investors also become more risk averse?
A. The x-axis intercept would decline, and the slope would increase.
B. The y-axis intercept would increase, and the slope would decline.
C. The SML would be affected only if betas changed.
D. Both the y-axis intercept and the slope would increase, leading to higher required returns.
E. The y-axis intercept would decline, and the slope would increase.
Answer: E
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The accounting firm of Pie and Lowell is examining its client base to determine how profitable its regular clients are. Its analysis indicates that Chico, Inc. paid $116,000 in fees last year, but cost the firm $124,000 ($106,000 in billable labor, supplies, and copying, and $18,000 in allocated common fixed costs). If Pie and Lowell dropped Chico, Inc. as a client, and all fixed costs are unavoidable, how would profit be affected?
A. Increase $8,000 B. Decrease $116,000 C. Decrease $10,000 D. $0
Organizational core values form the foundation of a firm's decisions.
Answer the following statement true (T) or false (F)
This manager believes that if people are committed to their goals, they will exercise self-direction and self-control.
A. Theory Y B. Theory X C. Theory A D. Theory Z
At Dell's website, a student can order a laptop computer with the exact memory capability and software that she wants and have it shipped to her dorm room within 48 hours. This is an example of
A. a single target market approach. B. a combined target market approach. C. a diversification strategy. D. mass customization. E. task transfer.