Explain why you agree or disagree with the following statement: "It is always better to have a portfolio with more convexity than one with less convexity."
What will be an ideal response?
It is not always better to have a portfolio with more convexity than one with less convexity. This is illustrated if one examines the portfolios associated with Exhibit 24-5 . Although with all other things equal it is better to have more convexity than less, the market charges for convexity in the form of a higher price or a lower yield. But the benefit of the greater convexity depends on how much yields change. As can be seen from the second column of Exhibit 24-5, if market yields change by less than 100 basis points (up or down), the bullet portfolio, which has less convexity, will provide a better total return.
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Sales territories should, in most cases, be established on the basis of:
A) seniority of salespeople B) prospects for new accounts C) mature product lines D) number of customers E) sales potential
Which of the following statements is true?
a. When bonds are issued at a premium, the periodic cash payment to bondholders will exceed the cash payment that would have been made if the bonds had been issued at a discount. b. When bonds are issued at a discount, the periodic cash payment to bondholders will be less than the cash payment that would have been made if the bonds had been issued at a premium. c. When bonds are issued at a discount, the periodic cash payment to bondholders will be less than the cash payment that would have been made if the bonds had been issued at face value. d. When bonds are issued at a discount, the periodic cash payment to bondholders will be the same as the cash payment that would have been made if the bonds had been issued at face value. e. When bonds are issued at a premium, the periodic cash payment to bondholders will exceed the cash payment that would have been made if the bonds had been issued at face value.
Common law includes statutes and ordinances enacted by legislative bodies
Indicate whether the statement is true or false
Ross Corporation produces a single product. The company has direct materials costs of $8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty percent of the manufacturing overhead is for fixed costs. In addition, variable selling and administrative expenses are $2 per unit, and fixed selling and administrative expenses are $3 per unit at the current activity level. Assume that direct labor is a variable cost.Under absorption costing, the unit product cost is:
A. $24 per unit B. $29 per unit C. $20 per unit D. $26 per unit