Which of the following best describes the most common criticisms of the investment styles of Warren Buffet and David Swensen, respectively? Lack of understanding of new technologies/ lack of diversification. Too much domestic US focus / disregard for rebalancing. Lack of diversification / too little emphasis on income needs. Lack of diversification / too much equity allocation.
Q: for some statements on how financial managers can create value for their firms. Which of the…
A: Value Creation: A firm (read, corporation) has a distinct legal identity that is separate from its…
Q: Conventional wisdom says that one should measure a manager’s investment performance over an entire…
A: The arguments to support or contradict the convention are:
Q: A challenge facing U. S. companies adopting IFRS is ______________________________. a.certain areas…
A: Some companies earlier following US GAAP have adopted IFRS for accounting and reporting purposes.
Q: Which of the following statements is FALSE? As debt increases, the risk associated with bankruptcy…
A: Source of raising capital include: Equity financing Debt financing Loans from financial…
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A: Indirect costs of financial distress is not the directly present cost in the financial statements…
Q: Why is diversification considered “good” by most professionals? Can you think of a situation where…
A: Investment means engaging your funds to generate income for the future. Risk and return are two…
Q: Is the claim that lower company taxes adding to investments correct or is it debatable given the…
A: The money left after expenditure is savings. Savings are used by the individuals for investment. Not…
Q: How are conflicts between the shareholders and the management created? Which of the following is…
A: Conflicts between the shareholders and the management majorly arise due to the differences in…
Q: Vhich of the following is NOT a proactive financial strategy related to the OLI paradigm in…
A: OLI stands for Ownership advantages, location advantages and internationalisation advantages.
Q: 'Market structures are often criticised for being too unrealistic in their assumptions of how firms…
A: Answer:- Market structure meaning:- In economics, the market structure describes how the businesses…
Q: Why does Limitations of Portfolio analysis is It is not always clear what makes an industry…
A: Solution- Duration Duration is the number of years until which the investor will receive the…
Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…
A: To increase capital assets, business do investments in property, fixed assets, financial market,…
Q: New entrants are attracted when the organizations’ profits are well in excess of the cost of…
A: In today's world of finance and commerce barriers to entry is a very strong force that determines…
Q: GohwaT has a client who has inquired about the valuation method best suited for comparison of…
A: The question is based on the concept of Accounting Theory.
Q: Which of the following statements regarding EVA is NOT CORRECT? Group of answer choices: EVA assumes…
A: EVA represents the increment in the return on investment of the company. If the EVA is not positive,…
Q: Which of the following is not a factor that a firm's management take into consideration when…
A: Short-term financing policy refers to policy in which funds requirements are for less than one year…
Q: how do you expect the financing choices of the following firms to differ, explain the reasons for…
A: A business firm or a corporation can not fully finance and fund its operations and functions with…
Q: Shortening the cash conversion cycle always enhances the shareholder value
A: Note: Hi! Thank you for the question As per the honor code, We’ll answer the first question since…
Q: Which of the following is true regarding IPO pricing? Answers: Underpricing is more popular…
A: Correct answer is (a) Underpricing is more popular which hurts the firm.
Q: Why does Portfolio analysis limitation is it suggests the use of standard strategies that can miss…
A: Portfolios analysis is the method through which the corporations view their business units and…
Q: Which ONE of the following statements is FALSE? O Firms report peripheral gains and losses on a…
A: Restructuring is a process in which company change their capital structure, and debt convert into…
Q: Which of the following statement is false? a. None of above b. The capital structure should be…
A:
Q: Which of the following is false regarding book and market values? Select one: O a. Financial…
A: If the market does not trust that the firm is worth the value on its books, its market value might…
Q: It is an axiom that may be characterized by managers making decisions that conflict with the best…
A: Agency problem arises during the time of dissatisfaction or conflict of interest between the…
Q: (a) Explain what the companies should đo with their proits, onditional to the vailability of absence…
A: in order to run the business that the need of profit. the profit is owned by the business through…
Q: international diversification is more likely to achieve significant risk reduction if one: A…
A: International diversification helps reduce the concentration risk of investing in one region or in…
Q: The more certain a firm is about its sales, costs, and order lead time, the closer the firm can…
A: The answer is option c. relaxed current asset investment policy.
Q: In a world of much friction and imbalance, discuss how Miller and Modigliani (M&M) arrive at the…
A: Miller and Modigliani (M&M) Approach is a capital theory approach propounded in 1950 which…
Q: Which of the following is not an advantage of technical analysis identified by technicians? a.…
A: Financial analysis is the process through which the budgets, operations, projects, businesses, and…
Q: Many firms still use the internal rate of return rule instead of net present value. When used…
A: The net present value (NPV) and internal rate of return (IRR) are the methods that are used for the…
Q: reduce political risk
A: Political risk refers to those risk that arises due to the change in government body of a country.…
Q: Moral hazard is a barrier to financing global growth because: OPTIONS: if investors have trouble…
A: Moral hazard is a situation which occurs as a result of the lack of accurate information or…
Q: market prices reflect underlying asset values.
A: Market refers to the place where the purchase or sale of goods and services takes place like…
Q: Which one of the following is NOT an implication of market efficiency for corporate finance?
A: Since you have posted multiple independent questions in the same request, we will solve the first…
Q: How are conflicts between the shareholders and the management created? Which of the following is…
A: Management group might be more ready to take on more significant levels of chance, while…
Q: Which of the following statements about fundamental analysis is least likely accurate? a. It…
A: Fundamental analysis is an essential analysis technique used to analyse business and it's value.
Q: Which of the following statement are true? Direct transfer of capital involves the aid of…
A: The answer for the multiple choice question and relevant explanation are presented hereunder : There…
Q: Which of the statement is TRUE in financial decision making? A. When the economy is growing of…
A: Financial Decision making refers to the decisions made by the managers with regard to the finances…
Q: The complexity posed by differences in the cultural, political, legal, and economic environments…
A: The liabilities of foreignness is nothing but an additional costs that multinational enterprises…
Q: Which of the following is not an example of a mitigating factor that reduces the risk that the going…
A: As per AS 2415: Consideration of an entity's ability to continue as a going concern, if auditor find…
Q: Which of the statement is TRUE in Managements’ Attitude as part of factor influencing the decision…
A: Under financial management, there can be either a conservative or aggressive approach. The…
Q: If a company decides to use FDI as its primary strategy to enter new foreign markets, a likely…
A: Foreign direct investment is a strategy by which firms expand and enter into new markets.
Q: Which of the following statement(s) is/are not true? i. Return On Investment (ROI) as a…
A: i. Return On Investment (ROI) as a performance measure may discourage managers of divisions with…
Q: Which of the following would be most difficult to assess? Select one :- a. the liquidity position of…
A: The liquidity position of a firm can be easily assessed through liquidity ratios like : current…
Q: Empirical evidence indicates that the returns to shareholders of the target firm vary significantly…
A: According to Empirical evidence, the shareholders of the taget firm have the advantage of earning…
Q: Compared to other firms in the industry, a company that maintains a conservative working capital…
A: Higher ratio of current assets to fixed assets
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- Which of the following statements is true? Group of answer choices The Principle of Diversification states that investors are better off by investing in one asset. The Principle of Diversification states that investors are better off by investing in different types of assets. The Principle of Diversification states that investors are better off by investing in risk-free assets. The Principle of Diversification states that investors are better off by investing in an industry of their choice.Is the claim that lower company taxes adding to investments correct or is it debatable given the prediction on economic growth remains negative, and can you explain why? Your advise on this is ____________________ (provide your answer and justification. Feel free to use external resources to assist you in your answer if you prefer).Why is it important for an investor to create a well-diversified investment portfolio? How should an investor allocate investment funds across sectors and industries? To support responses, provide examples of companies that were negatively affected by a lack of ethical guidelines.
- Which of the following statements is incorrect? Select one: A. It is possible for markets to be efficient with respect to some information and inefficient with respect to other information B. It is possible for some markets to be more efficient than others C. The market is likely to be more efficient with respect to companies where there is greater analyst following D. The market is totally efficient with respect to companies providing regular dividends to investorsWhich of the following is false about diversification? Select one or more: a. diversification only works when returns on investments move in different ways b. diversification results in higher Sharpe ratios c. diversification reduces risk d. diversification eliminates riskModigliani and Miller suggest that, under certain assumptions, financing decisions do not matter in that they do not affect the value of the firm. They define when these assumptions hold as perfect markets. Which of the following are assumptions that they claim must hold for financing decisions to be irrelevant? Group of answer choices There are no taxes There are no transaction costs The firm has a fixed investment policy The sun must rise in the North and set in the South
- You observed that high-level managers make superior returns on investments in their company’s stock. Would this be a violation of weak-form market efficiency? Would it be a violation of strong-form market efficiency?In one sense, international investing may be viewed as no more than a straight-forward generalisation of portfolio selection in a domestic market on the other hand, international investments pose problems not encountered in domestic markets. (a) Discuss the above statement in detail highlighting the similarities and differences between domestic and international investing. Identify the challenges and problems of international investing. (b) Outline and explain the advantages of international investing. (c) Outline and explain the disadvantages of international investing.Many firms still use the internal rate of return rule instead of net present value. When used properly, the two rules lead to the same decision, but the internal rate of return rule has several pitfalls that can trap the unwary.Explain with reasons, THREE (3) pitfalls of using the internal rate of return rule in appraising capital investment.
- With a decline in the number of publicly traded companies and the growth of other investment vehicles such as private equities, hedge funds, junk bonds, etc., some people claim that the investment world is becoming more and more unfair towards smaller investors since most of the alternative investment vehicles are only available to institutions or high-net-worth individuals. Do you agree or disagree with this claim?Which of the following does NOT refer to the ways of how a multinational company can reduce political risk? Taking a conservative approach to investment and adjusting NPV of the project by reducing expected cash flows or by increasing the cost of capital in accordance with existing trends. Purchasing insurance policy against political risks. Acquiring minor shares in foreign corporations. Creating a joint venture with local partners or a consortium with other multinational companies.The weak form of the efficient market hypothesis implies that: CHOOSE ONE A. Investors can achieve abnormal returns, on average, using technical analysis, after adjusting for transaction costs and taxes. B. Insiders, such as specialists and corporate board members, cannot achieve abnormal returns on average. C. No one can achieve abnormal returns using market information. D. NONE OF THE ABOVE