A hybrid alternative that is rapidly gaining popularity which trades on an exchange but where prices are kept close to the value of the underlying portfolio through arbitrage activities by a few institutional investors is called
A) exchange-traded fund.
B) open-end fund.
C) closed-end fund.
D) country fund.
Answer: A
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To prove predatory pricing, it must be proved that the destructive company explicitly tried to ruin a competitor and that the predatory price was below the predator's average variable cost.
Answer the following statement true (T) or false (F)
Blanton Corporation increased its financial leverage during 2010 by taking out a loan and using the proceeds to
buy back common stock. At the end of 2010, the corporation reported higher earnings per share and higher return on equity. However, its stock price declined. Discuss why this may happen.
Which of the following insurance policies continues for a stated period of time with the premiums increasing with the age of the insured?
A. double indemnity B. term insurance C. annuity contract D. comprehensive insurance
Bourland Corporation is considering a capital budgeting project that would require investing $80,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $250,000 and annual incremental cash operating expenses would be $180,000. The project would also require a one-time renovation cost of $40,000 in year 3. The company's income tax rate is 30% and its after-tax discount rate is 8%. The company uses straight-line depreciation. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The net present value of the entire project is closest to:See separate Exhibit 13B-1, to determine the appropriate discount factor(s) using the tables provided.
A. $120,080 B. $112,000 C. $159,928 D. $79,928