What is the diversification achieved by an investor if he invests in Dell, IBM, and Microsoft?
What will be an ideal response?
Answer: There will not be much diversification achieved by investing in Dell, IBM, and Microsoft, because all three have similar business and thus, high common risk.
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DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey. Although DWK is selling some of the products over the Internet, in order to gain economies of scale, the products must be sold in retail outlets as well. The main barrier to entry that DWK is likely to encounter here is:
A. government licensing and permits. B. access to distribution channels. C. consumers' switching costs. D. cost disadvantages independent of scale.
The liquidity of a monetary asset is
A. the difference between the interest rate on the asset and the interest rate on short-term government securities. B. how quickly and easily it can be used to purchase goods and services. C. its time to maturity. D. also called its principal value.
An Internal Revenue Code rule that impacts the design of pension plans is that:
A) employee contributions to the pension fund are not taxable to the employee until pension benefits are actually received. B) pension fund earnings are taxable. C) employer contributions to the pension fund are not taxable to the employee at the time pension benefits are actually received. D) all employer pension expenses are deductible for income tax purposes.
Laughing at your boss's humor tends to be an effective political tactic because
A) kissing up is a standard part of most jobs. B) most managers are emotionally insecure. C) the shared laughter helps build rapport. D) a boss who laughs gives generous salary increases.