Explain the relationship between correlation, diversification, and risk reduction
What will be an ideal response?
Answer: Correlation is a statistic that measures the relationship between returns on assets. Positively correlated assets move together; negatively correlated opposites move in opposite directions. Diversification reduces risk most effectively when the assets have low or negative coefficients of correlation.
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Which of the following statements is true in comparing for-profit service firms and nonprofit organizations?
A. While for-profit service firms market tangible products, nonprofit organizations market intangible products. B. Both often require the customer to be present during the production process. C. While for-profit service firms vary greatly from producer to producer, nonprofit organizations are uniform across producers. D. Both vary greatly from day to day, but with the same producer the day-to-day variations are eliminated.
A completed gift promise cannot be rescinded for lack of consideration
Indicate whether the statement is true or false
Financial information for Sigma Company is presented below. Calculate the following ratios for Year 2:(a) Inventory turnover.(b) Accounts receivable turnover.(c) Return on total assets.(d) Times interest earned.(e) Total asset turnover.?Year 2Year 1Assets:??Cash$ 18,000$ 22,000Marketable securities25,0000Accounts receivable38,00042,000Inventory61,00052,000Prepaid insurance6,0009,000Long-term investments49,00020,000Plant assets, net 218,000 225,000Total assets$415,000$370,000???Net income after interest expense and taxes$ 62,250?Sales (all on credit)305,000?Cost of goods sold123,000?Interest expense15,600?Income tax expense27,000???
What will be an ideal response?
Managing inventory involves trading off the benefits of availability with various financial concerns such as storage, insurance, and obsolescence
Indicate whether the statement is true or false