Q: Why are fixed assets reported on the balance sheet at a price that may not be accurate
A: Fixed assets are those that are not subject to change. Fixed assets are retained for an extended…
Q: The return on assets ratio is a: Group of answer choices A)Liquidity ratio. b)Solvency ratio.…
A: Return of assets calculates the amount of profit generated on the amount of assets invested.
Q: When lower profits and asset valuations are estimated when in doubt, the principle is applied.…
A: Conservatism principle refers to the set of guidelines of bookkeeping which ensures a high…
Q: 4. Relevance of information provided by a measurement basis is affected by: 1. The sensitivity of…
A: The usefulness of data generated by a measurement system is determined by how it affects financial…
Q: Why do most assets of the same type show positive covariances of returns with each other?
A: Covariance is a way of measuring the directional relationship between the returns on two assets and…
Q: Consider the following graph. According to CAPM, which of the following is TRUE? Assets E…
A: According to CAPM, The assets lying on security market line are correctly priced. The assets above…
Q: Because it tends to provide the most reliable measure of activity, all assets are reported on the…
A: All assets are reported on the balance sheet at their historical cost.
Q: Must two assets with the same fundamental characteristics (e.g. same payment stream, same credit…
A: Assets are valued on the basis of profit,cash flow and associated risk.But there value may not be…
Q: Given the dual effects of accountable events, an decrease in an asset cannot possibly be accompanied…
A: Assets = Liabilities + Stockholders equity Every transaction has dual effect . The question is…
Q: do liquid assets frequently have lower rates of return than fixed assets?
A: Liquid assets are the cash or cash equivalents which can be drained out frequently whereas fixed…
Q: Assuming no changes in other variables, which of the following would decrease ROA? B . A decrease in…
A: The Return on assets (ROA) shows just how lucrative a business is with respect to its total assets.
Q: The static GAP focuses on monitoring net interest income in the long term. Select one: True…
A: The Static GAP focuses on monitoring net interest income in the short term but it can be calculated…
Q: Is the value of money affected by time, and if it is, in which direction? O a. It is not affected O…
A: The value of time of money is the idea that the money currently available is worth more than the…
Q: What are the advantages of matching the maturities of assets and liabilities? What are the…
A: Matching the maturities of assets and liabilities refers to matching the similar category of assets…
Q: Which of the following is Not correct An increase in a liability may result in a decrease in owner's…
A: The accounting equation is known as the equation that describes the transaction in accounting form.…
Q: A current ratio of less than one means current assets are less than current liabilities. Select one:…
A: The Current ratio the ability of an enterprise to meet its short term liabilities. The Formula of…
Q: correlated
A: Covariance can be defined as a statistical tool which helps to understand the relationship that…
Q: What role does the correlation what role does the correlation of two assets play in computation of…
A: The answer and the explanation can be seen below:
Q: The internal rate of return method provides a rate of return that approximates: Both the…
A: The internal rate of return shows the estimated rate of growth in a year from the particular…
Q: The fair value is the value of an asset as it appears on the balance sheet. O True O False
A: The balance sheet is one of the financial statements of the business, which represents the financial…
Q: The difference between the expected return and the actual return is referred to as the unexpected…
A: The excess amount over invested value that an investor estimates to realize over horizon of…
Q: Why might disinflation prove favorable to financial assets?
A: Disinflation is the reduction or lowering of the pace of inflation. In other words in situation of…
Q: Give an example of a transaction that results in: a. A decrease in an asset and a decrease in a…
A: Transaction analysis: Transaction analysis is an economic event that causes impact on the value of…
Q: a) What would be the value A? b) What would be the value B? c) What is the remaining balance after…
A: Information Provided: Amount = $150,000 Term = 30 year Rate = 6.01%
Q: Ratio between current assets and liabilities is called ratio
A: The ratio between current assets and current liabilities is called the current ratio instead of…
Q: On the balance sheet date, the book value (or carrying value) of an asset should always equal the…
A: Book value of an asset is based on the cost of the asset and depreciation charged over time. ie,…
Q: a. What is Liquidity Ratio? b. What is Asset Management Ratio
A: Solution of both the concepts are given below
Q: Which of the following is a suitable benefit to HCA? a. The profits of HCA are so unrealistic O b.…
A: Historical cost accounting (HCA) is the accounting method in which recording of transactions and…
Q: Which of the following would not result in an increase in both the current ratio and the acid test…
A: Current ratio is a financial ratio which helps to determine or analyse the liquidity in a company in…
Q: The relationship between two financial variables can be expressed in: * a) Pure ratio…
A: Ratio analysis help to analyse the financial statements of the company. The management can take…
Q: A reasonable probability that an investment will produce a loss a. risk b. value c. specualtion…
A: There are several investment styles through which one can generate profits or build wealth.
Q: In a margin account, the interests should be higher than the returns. TRUE OR FALSE?
A: In a margin account, the investor borrows from the broker. So, it is not necessary that the interest…
Q: Management of current liabilities arises, in part, because of a concern over a. (profitability).…
A: Current liabilities are obligations on an entity that are to be compensated by the organization…
Q: During a period of inflation, an account balance remains constant. With respect to this account, a…
A: Monetary items refers to those assets and liabilities whose value can be measured and expressed in…
Q: What is the opposite of a vacancy rate? A O Internal rate of return. BO Occupancy rate. CO…
A: The vacancy rate is a percentage measure for all the available rental places that are vacant. The…
Q: Give an example of a strength and a weakness of the accounting rate of return approach.
A: ARR stands for accounting rate of return, is a formula which computes the desired rate of return in…
Q: On the balance sheet date, the book value (or carrying value) of an asset should always equal the…
A: answer are as follows
Q: Which of the following events will NOT increase the demand for assets? A. Decline in wealth…
A: Assets refers to any capital expenditure that will generate recurring returns to holder over long…
Q: Define negative working capital. Is a negative working capital a sign of illiquidity or of…
A: Working capital is amount of temporary cash available for companies for timely payments of company…
Q: The rate of return, discount rate, hurdle rate, and opportunity cost of capital all have the same…
A: Rate of return is the minimum rate of return that an investor expects while investing in a project.…
Q: Why is it more reasonable to assume, as the NPV rule does, that the intermediate cash flows are…
A: Before investing in new assets or projects, profitability is evaluated by using various methods like…
Q: The term expense represents a decrease in asset that always results in decrease in equity
A: The income statement records the revenues and expenses incurred during the period.
If the rates of
b. true
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- 4) Assume the index model is valid, what inputs will be required to determine covariance between two assets? A) βk B) βL C) σM D) all of the options E) None of the options are correct. Choose the correct answer with justification(T/F) The covariance between two assets ranges between -1.0 and 1.0. (T/F) If two risk) then their covariance must also be positive. True; False False; False True; True False; TrueWhich one of the following statements is correct?a. If NPV is positive, IRR will be less than required rate of returnb. If NPV = 0, IRR is equal to the required rate of returnc. If NPV is positive, IRR is equal to the required rate of returnd. If NPV is negative, IRR will be greater than the required rate of returne. None of the above
- By choosing assets that do not exhibit a high positive covariance with each other, the systematic risk be partially eliminated? a.false b.trueWhen two variables are not perfectly related, then their correlation would be one? a.true b.false21. Which of the following statements is most accurate? If the covariance of returns between two assets is 0.0023, then: A. the assets' risk is near zero. B. the asset returns are unrelated. abia C. the asset returns have a positive relationship.
- Please explain why this statement is (False). If a security's realized return is negative, it must have been true that the expected return was greater than the required return.Which of the following statement is true of a covariance matrix? a. The diagonal values are volatilities b. The non-diagonal values are covariances c. The non-diagonal values are coefficients of variations d. none of the aboveIf the returns from two assets have a correlation of 0: Select one: A. Their returns are perfectly opposed (when one increases the other decreases) B. There is no discernible relationship between the returns of the two assets C. The portfolio consisting of the two assets will be less risky than any of the two assets held individually D. Their returns move in unison
- Which of the following indicates that two variables tend to move in the same direction? a.negative covariance b.probability c.covariance d.positive covarianceCh. 11. If two returns are positively related to each other, they will have a ________, and if they are negatively related to each other, the ______________. Group of answer choices positive covariance, covariance will be negative negative covariance, covariance will be zero positive covariance, standard deviation will be negative negative covariance, covariance will be positiveThe correlation coefficient between two assets is positive if and only if: a. The returns of the two assets always move in the same direction. b. The returns of the two assets are more likely to move in the opposite direction than to move in the same direction. c. The returns of the two assets never move in the same direction. d. The returns of the two assets are more likely to move in the same direction than not to.