The value of an individual security divided by the total value of the portfolio is referred to as the portfolio:
A. standard deviation.
B. variance.
C. weight.
D. beta.
E. balance.
Answer: C
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Forman Corporation extends credit to its customers to purchase appliances, furniture, and other goods. Forman Corporation could borrow from a bank using its accounts receivable as collateral, thereby placing debt on the balance sheet. Forman Corporation would then use the cash collections from the receivables to repay the bank loan with interest. Instead, Forman Corporation sells the accounts
receivable to the bank for an amount that is less than the cash the bank expects to collect from receivables purchased. The amount takes account of expected defaults, which would reduce the cash generated by the receivables. This difference between the amount paid to Forman Corporation by the bank for the receivables and the amount that the bank expects to collect from the receivables provides the bank with its expected return. Which of the following is/are true? a. Forman Corporation has no further obligation and will treat this transaction as a sale, with no incremental debt on the balance sheet and recognizing bad debt expense on the income statement. b. Forman Corporation has further obligations and will treat this transaction as a financing arrangement, recognizing bad debt expense on the income statement. c. Forman Corporation has further obligations and will treat this transaction as a financing arrangement, recognizing incremental debt on the balance sheet. d. Forman Corporation has no further obligation and will treat this transaction as a sale, with no incremental debt on the balance sheet. e. Forman Corporation has further obligations and will treat this transaction as a financing arrangement, recognizing incremental debt on the balance sheet and recognizing bad debt expense on the income statement.
Which of the following is considered a disadvantage of advertising in magazines?
a. lack of immediacy b. high cost c. limited distribution d. limited flexibility e. all of the above
The number of decision variables in the assignment problem does not change significantly when the number of resources or tasks increases
a. True b. False
The Lagrange multiplier values in sensitivity analysis for nonlinear programming models are valid only at the point of the optimal solution
a. True b. False