Mohit is very passionate about music and opens a recording studio of his own. However, he does not know much about running a business and within a short period, starts running into losses. Therefore, he shuts down the business. Which of the following threats is highlighted in the given scenario?
A. Too little money
B. Higher health insurance costs
C. Bigger regulatory burden
D. Lack of knowledge
Answer: D
You might also like to view...
Demographic forces are part of the __________ environment of organizations.
a. internal b. mechanical c. controllable d. task e. general
Which of the following items is not a modifying convention?
a. Matching b. Materiality c. Industry practices d. Conservatism
Federal legislation suggests but does not require that tests used in the employee selection process should be able to predict job success or failure
Indicate whether the statement is true or false.
Exhibit 8A.1You have been asked to use a CAPM analysis to choose between Stocks R and S, with your choice being the one whose expected rate of return exceeds its required return by the widest margin. The risk-free rate is 4.00%, and the required return on an average stock (or the "market") is 10.00%. Your security analyst tells you that Stock S's expected rate of return is equal to 11.00%, while Stock R's expected rate of return is equal to 12.00%. The CAPM is assumed to be a valid method for selecting stocks, but the expected return for any given investor (such as you) can differ from the required rate of return for a given stock. The following past rates of return are to be used to calculate the two stocks' beta coefficients, which are then to be used to determine the stocks' required
rates of return: Year Stock R Stock S Market 1 –22.00% –3.00% –11.00% 2 3.00% 6.00% 8.00% 3 21.00% 15.00% 25.00% Note: The averages of the historical returns are not needed, and they are generally not equal to the expected future returns. Refer to Exhibit 8A.1. Calculate both stocks' betas. What is the difference between the betas? That is, what is the value of betaR? betaS? (Hint: The graphical method of calculating the rise over run, or (Y2? Y1) divided by (X2? X1) may aid you.) A. 0.7785 B. 0.8493 C. 0.7864 D. 0.8178 E. 0.6606