Q&A Hero

Q: You are constructing a scatter plot of excess returns for stock A versus the market index. If the correlation coefficient between stock A and the index is -1, you will find that the points of the scatter diagram ___________ and the line of best fit has a ______________. A. all fall on the line of best fit; positive slope B. all fall on the line of best fit; negative slope C. are widely scattered around the line; positive slope D. are widely scattered around the line; negative slope

Q: A disagreement involving two or more unions over which should have control over a particular firm or industry isA) a closed shop. B) a union shop.C) a jurisdictional dispute. D) an industrial union.

Q: The balance sheet of the Park, Quid, and Reggie partnership on November 1, 2011 (before commencement of partnership liquidation) was as follows: Cash $ 60,000 Accounts payable $ 110,000 Accounts Receivable 130,000 Loan from Quid 40,000 Loan to Park 16,000 Park, capital (20%) 60,000 Loan to Reggie 22,000 Quid, capital (40%) 52,000 Plant assets-net 120,000 Reggie, capital (40%) 86,000 Total assets $ 348,000 Total liab./equity $ 348,000 Liquidation events in November were as follows: - All receivables were settled for $110,000; - Plant assets with a book value of $90,000 were sold for $52,000. Required: Determine how the available cash on November 31, 2011 should be distributed.

Q: We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate whenA) workers can easily be replaced by capital goods.B) the product produced in the industry has very few substitutes. C) the product is produced in a perfectly competitive industry.D) labor represents a relatively small portion of total costs.

Q: According to Tobin's separation property, portfolio choice can be separated into two independent tasks consisting of __________ and __________. A. identifying all investor imposed constraints; identifying the set of securities that conform to the investor's constraints and offer the best risk-return trade-offs B. identifying the investor's degree of risk aversion; choosing securities from industry groups that are consistent with the investor's risk profile C. identifying the optimal risky portfolio; constructing a complete portfolio from T-bills and the optimal risky portfolio based on the investor's degree of risk aversion D. choosing which risky assets an investor prefers according to the investor's risk-aversion level; minimizing the CAL by lending at the risk-free rate

Q: Which risk can be partially or fully diversified away as additional securities are added to a portfolio? I. Total risk II. Systematic risk III. Firm-specific risk A. I only B. I and II only C. I, II, and III D. I and III

Q: The first antitrust law in the United States was theA) Clayton Act. B) Contestable Markets Act.C) the Federal Trade Commission Act. D) Sherman Antitrust Act.

Q: The balance sheet of the Maude, Ned, and Oscar partnership on November 1, 2011 (before commencement of partnership liquidation) was as follows: Cash $ 12,000 Georgia, capital (40%) $ 36,000 Holly, capital (30%) 6,000 Festus, capital (50%) 31,000 Total assets $ 90,000 Total liab./equity $ 90,000 Cash $ 70,000 Accounts payable $ 42,000 Inventory 60,000 Notes payable 68,000 Loan to Maude 10,000 Maude, capital(20%) 30,000 Loan to Oscar 18,000 Ned, capital(20%) 32,000 Plant assets-net 80,000 Oscar, capital(60%) 66,000 Total assets $ 238,000 Total liab./equity $ 238,000 Liquidation events in November were as follows: - All the inventory was sold for $10,000 above book value; - Plant assets with a book value of $60,000 were sold for $34,000. Required: Determine how the available cash on November 31, 2011 should be distributed.

Q: Stock A has a beta of 1.2, and stock B has a beta of 1. The returns of stock A are ______ sensitive to changes in the market than are the returns of stock B. A. 20% more B. slightly more C. 20% less D. slightly less

Q: The market structure of monopoly exists when A) there are a small number of interdependent firms that constitute the entire market. B) there is a single producer of a product. C) there are many producers of differentiated products. D) there are many producers of a homogeneous product.

Q: The balance sheet of the partnership of Jim, Kim, and Larry is shown below as of September 1, 2011. The partners had decided to dissolve the partnership earlier in the year, and all assets were converted into cash and all partnership liabilities were paid. The remains of the partnership (with partner residual profit and loss sharing percentages) was as follows: Cash $ 150,000 Jim, capital (20%) $ (300,000) Kim, capital (40%) (150,000) Larry, capital (40%) 600,000 Total assets $ 150,000 Total liab./equity $ 150,000 The value of partners' personal assets and liabilities on July 1, 2011 were as follows: Jim Kim Larry Personal assets $ 450,000 $ 370,000 $ 400,000 Personal liabilities 200,000 210,000 195,000 Required: Prepare the final statement of partnership liquidation.

Q: The part of a stock's return that is systematic is a function of which of the following variables? I. Volatility in excess returns of the stock market II. The sensitivity of the stock's returns to changes in the stock market III. The variance in the stock's returns that is unrelated to the overall stock market A. I only B. I and II only C. II and III only D. I, II, and III

Q: The partnership of Georgia, Holly, and Izzy was dissolved, and by July 1, 2011, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on July 1, 2011 (with partner residual profit and loss sharing percentages) was as follows: Cash $ 10,000 Georgia, capital (40%) $ (20,000) Holly, capital (30%) (10,000) Izzy, capital (30%) 40,000 Total assets $ 10,000 Total liab./equity $ 10,000 The value of the partners' personal assets and liabilities on July 1, 2011 were as follows: Georgia Holly Izzy Personal assets $ 45,000 $ 30,000 $ 25,000 Personal liabilities 30,000 20,000 10,000 Required: Prepare the final statement of partnership liquidation.

Q: FirmAnnual SalesFirmAnnual SalesA$1000G$800B900H1200C120I1050D75J90E50K75F40L600According to the above table, the eight -firm concentration ratio of this industry isA) 94.5 percent. B) 96.0 percent. C) 92.5 percent. D) 82.5 percent.

Q: Semitool Corp. has an expected excess return of 6% for next year. However, for every unexpected 1% change in the market, Semitool's return responds by a factor of 1.2. Suppose it turns out that the economy and the stock market do better than expected by 1.5% and Semitool's products experience more rapid growth than anticipated, pushing up the stock price by another 1%. Based on this information, what was Semitool's actual excess return? A. 7% B. 8.5% C. 8.8% D. 9.25%

Q: The partnership of Dolla, Earl, and Festus was dissolved on January 1, 2011. The balance sheet at that date is shown below: Cash $ 12,000 Liabilities $ 36,000 Other assets 70,000 Loan from Dolla 1,000 Loan to Clara 8,000 Dolla, capital (20%) 6,000 Earl, capital (30%) 16,000 Festus, capital (50%) 31,000 Total assets $ 90,000 Total liab./equity $ 90,000 In January, $34,000 of the accounts receivable was collected, and an additional $6,000 was determined to be uncollectible. The remaining receivables are still expected to be collected. Required: Determine how the available cash on January 31, 2011 will be distributed. (Use a safe payments schedule.)

Q: The demand curve for a monopolistically competitive firm isA) the same as the industry demand curve.B) more elastic than the demand curve of the perfectly competitive firm.C) less elastic than the demand curve of the perfectly competitive firm. D) horizontal.

Q: A measure of the riskiness of an asset held in isolation is ____________. A. beta B. standard deviation C. covariance D. alpha

Q: The balance sheet of the Addy, Bess, and Clara partnership on January 1, 2011 (the date of partnership dissolution) was as follows: Cash $ 4,000 Liabilities $ 8,000 Other assets 26,000 Loan from Addy 1,000 Loan to Clara 2,000 Addy, capital (20%) 2,000 Bess, capital (40%) 9,000 Clara, capital (40%) 12,000 Total assets $ 32,000 Total liab./equity $ 32,000 In January, other assets with a book value of $16,000 were sold for $10,000 in cash. Required: Determine how the available cash on January 31, 2011 will be distributed. (Use a safe payments schedule.)

Q: A pure monopolist is selling 7 units at a price of $12. If the marginal revenue of the 8th unit is $4, then the price of the 8th unit isA) $10. B) $11. C) greater than $12. D) $4.

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 20%, while the standard deviation on stock B is 15%. The correlation coefficient between the returns on A and B is 0%. The standard deviation of return on the minimum-variance portfolio is _________.A. 0%B. 6%C. 12%D. 17%

Q: Creditors of the partnership may seek the personal assets of the partners to satisfy amounts owed. When this happens A) creditors may only file against partnership assets. B) creditors must file against all partners and recover their claims based on the individual partner's profit and loss distribution percentage. C) creditors must file against all partners and recover their claims based on the individual partner's percentage ownership. D) creditors may file against an individual partner to recover their claims, or against any combination of partners.

Q: When a perfectly competitive firm is in long-run equilibrium, economic profits A) are positive. B) are zero. C) are negative. D) may be positive, zero or negative depending upon costs.

Q: Which partner is considered the most vulnerable as a result of a computation of vulnerability rankings? A) The partner who has the lowest loss absorption potential B) The partner who has the highest loss absorption potential C) The partner with the highest capital account balance D) The partner with the lowest capital account balance

Q: Refer to the above figure. Line C in Panel B does not representA) the equilibrium price. B) average revenue.C) total revenue. D) marginal revenue.

Q: In a schedule of assumed loss absorptions A) the partner with lowest loss absorption is eliminated last. B) it is necessary to have a cash distribution plan first. C) the least vulnerable partner is eliminated first. D) the most vulnerable partner is eliminated first.

Q: Which of the following statements regarding the relationship between average and marginal costs is INCORRECT?A) There is always a definite relationship between average and marginal cost. B) When marginal costs are less than average costs, the latter must fall.C) When marginal costs are greater than average costs, the latter must rise.D) There is no way for average variable costs to fall when marginal costs are falling.

Q: The Leo, Mark and Natalie Partnership had the following capital balances and profit/loss sharing percentages: Balance Sharing % Leo $200,000 50% Mark $160,000 40% Natalie $140,000 10% Newsome is going to buy into the partnership by paying $200,000 for a 20% ownership in the partnership. Required: 1. If Newsome pays the partnership directly, what are the four partner capital balances immediately following Newsome's admission to the partnership using the bonus method? Assume the partnership assets are not revalued. 2. If Newsome pays the partnership directly, what are the four partner capital balances immediately following Newsome's admission to the partnership using the goodwill method? Assume the partnership assets are revalued. The $200,000 amount paid by Newsome is fair value for a 20% share of the partnership.

Q: The time period during at least one input cannot be changed is theA) production time. B) calendar year. C) long run. D) short run.

Q: A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2011 is shown below. Partners Akerly, Baskin, and Crow allocate profit and loss in their respective ratios of 3:2:1. The partnership agreed to pay partner Baskin $500,000 for his partnership interest upon his retirement from the partnership on January 1, 2012. The partnership financials on January 1, 2012 are: Assets Cash $ 70,000 Marketable securities 190,000 Inventory 360,000 Land 110,000 Building-net 570,000 Total assets $1,300,000 Equities Akerly, capital $630,000 Baskin, capital 420,000 Crow, capital 250,000 Total equities $1,300,000 Required: Prepare the journal entry to reflect Baskin's retirement from the partnership: 1. Assuming a bonus to Baskin. 2. Assuming a revaluation of total partnership capital based on excess payment. 3. Assuming goodwill equal to the excess payment is recorded.

Q: When economic profits are positive, accounting profitsA) must be positive. B) will be negative.C) will equal zero. D) could be positive, negative or zero.

Q: A summary balance sheet for the Ash, Brown, and Curly partnership on December 31, 2011 is shown below. Partners Ash, Brown, and Curly allocate profit and loss in their respective ratios of 2:1:1. The partnership agreed to pay partner Brown $135,000 for his partnership interest upon his retirement from the partnership on January 1, 2012. The partnership financials on January 1, 2012 are: Assets Cash $ 75,000 Marketable securities 60,000 Inventory 85,000 Land 90,000 Building-net 110,000 Total assets $420,000 Equities Ash, capital $210,000 Brown, capital 105,000 Curly, capital 105,000 Total equities $420,000 Required: Prepare the journal entry to reflect Brown's retirement from the partnership: 1. Assuming a bonus to Brown. 2. Assuming a revaluation of total partnership capital based on excess payment. 3. Assuming goodwill equal to the excess payment is recorded.

Q: The quantity of good A is measured along the vertical axis, and the quantity of good B is measures along the horizontal axis. If the price of Good A fallsA) the vertical intercept of the budget line moves along the vertical axis away from the origin. B) the vertical intercept of the budget line moves along the vertical axis toward the origin.C) the horizontal intercept (along Good B) of the budget line will increase.D) none of the above

Q: Slices of PizzaTotal UtilityMarginal Utility00-120 250 3 204 105 0In the above table, marginal utility begins to diminish after consumption of theA) second slice of pizza. B) third slice of pizza.C) fourth slice of pizza. D) fifth slice of pizza.

Q: A summary balance sheet for the Sissy, Jody, and Buffy partnership on December 31, 2011 is shown below. Partners Sissy, Jody, and Buffy allocate profit and loss in their respective ratios of 3:4:6. The partnership agreed to pay Buffy $360,000 for her partnership interest upon her retirement from the partnership on January 1, 2012. Any payments exceeding Buffy's capital balance are treated as a bonus from partners Sissy and Jody. Assets Cash $110,000 Marketable securities 100,000 Inventory 240,000 Land 90,000 Building-net 140,000 Total assets $680,000 Equities Sissy, capital $220,000 Jody, capital 170,000 Buffy, capital 290,000 Total equities $680,000 Required: Prepare the journal entry to reflect Buffy's retirement.

Q: A summary balance sheet for the Uma, Van, and Walter partnership on December 31, 2011 is shown below. Partners Uma, Van, and Walter allocate profit and loss in their respective ratios of 4:5:7. The partnership agreed to pay Walter $227,500 for his partnership interest upon his retirement from the partnership on January 1, 2012. Any payments exceeding Walter's capital balance are treated as a bonus from partners Uma and Van.AssetsCash $ 75,000Marketable securities 60,000Inventory 87,500Land 90,000Building-net 150,000Total assets $462,500EquitiesUma, capital $212,500Van, capital 112,500Walter, capital 137,500Total equities $462,500Required:Prepare the journal entry to reflect Walter's retirement.

Q: The cross-price elasticity of demand of products ʺMʺ and ʺNʺ is zero. This implies that ʺMʺ and ʺNʺ areA) substitute products.B) complementary products.C) independent products.D) unique goods, as the price elasticity of demand for one of them is zero.

Q: A summary balance sheet for the partnership of Quail, Rainne and Selma on December 31, 2011 is shown below. Partners Quail, Rainne and Selma allocate profit and loss in their respective ratios of 6:3:1. Assets Cash $ 320,000 Marketable securities 640,000 Inventory 270,000 Land 130,000 Building-net 210,000 Total assets $1,570,000 Equities Quail, capital $ 670,000 Rainne, capital 580,000 Selma, capital 320,000 Total equities $1,570,000 The partners agree to admit Trask for a one-tenth interest. The fair market value for partnership land is $260,000, and the fair market value of the inventory is $370,000. Required: 1. Record the entry to revalue the partnership assets prior to the admission of Trask. 2. Calculate how much Trask will have to invest to acquire a 10% interest. 3. Assume the partnership assets are not revalued. If Trask paid $300,000 to the partnership in exchange for a 10% interest, what would be the bonus that is allocated to each partner's capital account?

Q: PricePer Unit Quantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. Demand is unit elastic between the prices ofA) $5.00 & $10.00. B) $6.00 & $7.00. C) $6.00 & $6.50. D) $7.00 & $7.50

Q: Consider two perfectly negatively correlated risky securities, A and B. Security A has an expected rate of return of 16% and a standard deviation of return of 20%. B has an expected rate of return of 10% and a standard deviation of return of 30%. The weight of security B in the minimum-variance portfolio is _________. A. 10% B. 20% C. 40% D. 60%

Q: A summary balance sheet for the partnership of Maddy, Nelson and Olsen on December 31, 2011 is shown below. Partners Maddy, Nelson and Olsen allocate profit and loss in their respective ratios of 9:6:10. Assets Cash $ 50,000 Marketable securities 120,000 Inventory 75,000 Land 80,000 Building-net 400,000 Total assets $725,000 Equities Maddy, capital $425,000 Nelson, capital 225,000 Olsen, capital 75,000 Total equities $725,000 The partners agree to admit Poosh for a one-tenth interest. The fair market value for partnership land is $180,000, and the fair market value of the inventory is $150,000. Required: 1. Record the entry to revalue the partnership assets prior to the admission of Poosh. 2. Calculate how much Poosh will have to invest to acquire a 10% interest. 3. Assume the partnership assets are not revalued. If Poosh paid $200,000 to the partnership in exchange for a 10% interest, what is the bonus that is allocated to each partner's capital account?

Q: When no property rights exist,A) no one has an economic incentive to care for common property, and an externality may well occur.B) there will be no production.C) externalities will be internalized by voluntary arrangements among a small group of parties.D) society will produce beyond the production possibilities frontier, but the allocation of resources is not apt to be optimal.

Q: The standard deviation of return on investment A is .10, while the standard deviation of return on investment B is .04. If the correlation coefficient between the returns on A and B is -.50, the covariance of returns on A and B is _________. A. -.0447 B. -.0020 C. .0020 D. .0447

Q: The top 5 percent of health care users in the United States account forA) 30 percent of all health costs. B) over 50 percent of all health costs.C) over 75 percent of all health costs. D) almost 90 percent of all health costs.

Q: A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 35%, while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is .45. Stock A comprises 40% of the portfolio, while stock B comprises 60% of the portfolio. The standard deviation of the return on this portfolio is _________. A. 23% B. 19.76% C. 18.45% D. 17.67%

Q: The profit and loss sharing agreement for the Jill, Kelly, and Lila partnership provides that each partner receives a bonus of 5% on the original amount of partnership net income if net income is above $25,000. Jill and Kelly receive a salary allowance of $7,500 and $10,500, respectively. Lila has an average capital balance of $260,000, and receives a 10% interest allocation on the amount by which her average capital account balance exceeds $200,000. Residual profits and losses are allocated to Jill, Kelly, and Lila in their respective ratios of 7:5:8. Required: Prepare a schedule to allocate $88,000 of partnership net income to the partners.

Q: Greta, Harriet, and Ivy have a retail partnership business selling personal computers. The partners are allowed an interest allocation of 6% on their average capital. Capital account balances on the first day of each month are used in determining weighted average capital, regardless of additional partner investment or withdrawal transactions during any given month. Withdrawals of capital that are debited to the capital account are used in the average calculation. Partner capital activity for the year was: Capital accounts Greta Harriet Ivy Jan 1 balance $680,000 $500,000 $580,000 Feb 12 investment 40,000 Mar 26 investment 20,000 Apr 20 withdrawal (10,000) May 8 withdrawal (15,000) (8,000) Jul 3 investment 14,000 Sep 29 investment 8,000 3,000 6,000 Nov 5 investment 3,000 Required: Calculate weighted average capital for each partner, and determine the amount of interest that each partner will be allocated. Round all calculations to the nearest whole dollar.

Q: What is a monopsony and how does a monopsonistic firm determine the wage rate to pay its employees?

Q: A union shop is aA) strike by a union in sympathy with another unionʹs strike or cause.B) dispute involving two or more unions over which should have control of a particular jurisdiction.C) business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired.D) business which may hire nonunion members conditional on their joining the union by some specified date after employment begins.

Q: Daniel, Ethan, and Frank have a retail partnership business selling personal computers. The partners are allowed an interest allocation of 8% on their average capital. Capital account balances on the first day of each month are used in determining weighted average capital, regardless of additional partner investment or withdrawal transactions during any given month. Withdrawals of capital that are debited to the capital account are used in the average calculation. Partner capital activity for the year was: Capital accounts Daniel Ethan Frank Jan 1 balance $ 200,000 $ 300,000 $ 250,000 Feb 2 investment 50,000 Mar 6 investment 10,000 20,000 Apr 20 withdrawal (10,000) Jul 3 withdrawal and investment (7,000) 10,000 Sep 29 investment 5,000 4,000 5,000 Nov 5 investment 5,000 Required: Calculate weighted average capital for each partner, and determine the amount of interest that each partner will be allocated. Round all calculations to the nearest whole dollar.

Q: The _________ reward-to-variability ratio is found on the ________ capital market line. A. lowest; steepest B. highest; flattest C. highest; steepest D. lowest; flattest

Q: Use the following information to answer the question(s) below.Adam, Bella, and Chris operate a partnership with a complex profit and loss sharing agreement. The average capital balance for Adam, Bella and Chris on December 31, 2011 is $120,000, $270,000, and $340,000, respectively. A 6% interest allocation is provided to each partner based on the average capital balance on December 31, 2011. Adam and Bella receive salary allocations of $40,000 and $50,000, respectively. If partnership net income is above $160,000, after the salary allocations are considered (but before the interest allocations are considered), Chris will receive a bonus of 10% of the income (pre-salary and interest, but net of the bonus). All residual income is allocated in the ratios of 2:2:6 to Adam, Bella, and Chris, respectively.Required:1. Prepare a schedule to allocate income or loss to the partners assuming that the partnership incurs a net loss of $26,200 for 2011.2. Prepare a journal entry to distribute the partnership's loss to the partners (assume that an Income Summary account is used by the partnership).

Q: We would expect that a rise in labor supply will have a proportionately larger effect on the market wage rate whenA) the demand for labor is unitary elastic.B) the demand for labor is inelastic. C) the supply for labor is elastic D) the demand for labor is elastic.

Q: Which of the following is exempt from antitrust laws?A) Professional basketball B) Suppliers of military equipmentC) Telephone companies D) Automobile companies

Q: The optimal risky portfolio can be identified by finding: I. The minimum-variance point on the efficient frontier II. The maximum-return point on the efficient frontier and the minimum-variance point on the efficient frontier III. The tangency point of the capital market line and the efficient frontier IV. The line with the steepest slope that connects the risk-free rate to the efficient frontier A. I and II only B. II and III only C. III and IV only D. I and IV only

Q: The market structure of oligopoly is whenA) there are a small number of interdependent firms that constitute the entire market. B) there is a single producer of a product.C) there are many producers of a differentiated product. D) there are many producers of a homogeneous product.

Q: Rational risk-averse investors will always prefer portfolios _____________. A. located on the efficient frontier to those located on the capital market line B. located on the capital market line to those located on the efficient frontier C. at or near the minimum-variance point on the efficient frontier D. that are risk-free to all other asset choices

Q: Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2011 is $300,000 for Xavier, $250,000 for Young, and $325,000 for Zane. An 8% interest allocation is provided to each partner based on the average capital balance on December 31, 2011. Xavier and Young receive salary allocations of $10,000 and $15,000, respectively. If partnership net income is above $25,000, after the salary allocations are considered (but before the interest allocations are considered), Zane will receive a bonus of 10% of the original amount of net income. All residual income is allocated in the ratios of 2:3:5 to Xavier, Young, and Zane, respectively.Required:1. Prepare a schedule to allocate income or loss to the partners assuming that the partnership incurs a net loss of $36,000 for 2011.2. Prepare a journal entry to distribute the partnership's loss to the partners (assume that an Income Summary account is used by the partnership).

Q: Use the following information to answer the question(s) below.Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2011 is $300,000 for Xavier, $250,000 for Young, and $325,000 for Zane. An 8% interest allocation is provided to each partner based on the average capital balance on December 31, 2011. Xavier and Young receive salary allocations of $10,000 and $15,000, respectively. If partnership net income is above $25,000, after the salary allocations are considered (but before the interest allocations are considered), Zane will receive a bonus of 10% of the original amount of net income. All residual income is allocated in the ratios of 2:3:5 to Xavier, Young, and Zane, respectively.Required:1. Prepare a schedule to allocate income to the partners assuming that partnership net income for 2011 is $250,000.2. Prepare a journal entry to distribute the partnership's income to the partners (assume that an Income Summary account is used by the partnership).

Q: FirmAnnual SalesFirmAnnual SalesA$1000G$800B900H1200C120I1050D75J90E50K75F40L600According to the above table, if the fourth and fifth largest firms in the industry merge, the four-firm concentration ratio in the industry will beA) 82.5 percent. B) 35.8 percent. C) 69.0 percent. D) 84.1 percent.

Q: The term complete portfolio refers to a portfolio consisting of _________________. A. the risk-free asset combined with at least one risky asset B. the market portfolio combined with the minimum-variance portfolio C. securities from domestic markets combined with securities from foreign markets D. common stocks combined with bonds

Q: Since the firm in the above figure is operating in a monopolistically competitive industry, in the long run we can expect to seeA) the typical firmʹs economic profits expand as production becomes more efficient. B) more firms entering the industry until economic profits are zero.C) the typical firm producing at the minimum point on its ATC curve. D) each firm expand its share of the total market.

Q: On a standard expected return versus standard deviation graph, investors will prefer portfolios that lie to the _____________ the current investment opportunity set. A. left and above B. left and below C. right and above D. right and below

Q: The profit and loss sharing agreement for the Tuttle, Upman, and Veer partnership provides for residual profits and losses to be allocated 2:3:6 to Tuttle, Upman, and Veer, respectively. In 2011, the partnership recorded $11,000 of net income that was properly allocated to the partners' capital accounts. On January 18, 2012, after the books were closed for 2011, Tuttle discovered that the $16,500 payment for the partnership's liability and workers compensation insurance for 2012 was recorded as insurance expense when it was paid on December 28, 2011. Required: Prepare the necessary correcting entry(s) for the partnership.

Q: You put half of your money in a stock portfolio that has an expected return of 14% and a standard deviation of 24%. You put the rest of your money in a risky bond portfolio that has an expected return of 6% and a standard deviation of 12%. The stock and bond portfolios have a correlation of .55. The standard deviation of the resulting portfolio will be ________________.A. more than 18% but less than 24%B. equal to 18%C. more than 12% but less than 18%D. equal to 12%

Q: The profit and loss sharing agreement for the Mason, Nell, and Odell partnership provides for a $15,000 salary allowance to Nell. Residual profits and losses are allocated 5:3:2 to Mason, Nell, and Odell, respectively. In 2010, the partnership recorded $120,000 of net income that was properly allocated to the partners' capital accounts. On January 25, 2011, after the books were closed for 2010, Mason discovered that office equipment, purchased for $12,000 on December 29, 2010, was recorded as office expense by the company bookkeeper. Required: Prepare the necessary correcting entry(s) for the partnership.

Q: Which of the following conditions hold true for both the perfectly competitive firm and the monopoly at the profit-maximizing output level?A) MR = P B) MC = ATC C) MC = P D) MR = MC

Q: Suppose that a stock portfolio and a bond portfolio have a zero correlation. This means that ______. A. the returns on the stock and bond portfolios tend to move inversely B. the returns on the stock and bond portfolios tend to vary independently of each other C. the returns on the stock and bond portfolios tend to move together D. the covariance of the stock and bond portfolios will be positive

Q: If a perfectly competitive industry is in long-run equilibrium, thenA) price equals average cost.B) price is greater than average cost and equal to marginal cost. C) all firms earn the same accounting profits.D) marginal cost is less than average cost.

Q: On July 1, 2011, Joe, Kline, and Lama began a partnership in which Joe and Kline each contributed cash of $200,000; and Lama contributed property with a fair value of $100,000 and a tax basis $150,000. Joe receives a 10% bonus of partnership income. Kline and Lama receive salaries of $40,000 each. The partnership agreement of Joe, Kline, and Lama provides that all partners receive 5% interest on capital and that profits and losses of the remaining income be distributed to Joe, Kline, and Lama by a 1:1:3 ratio. Required: Prepare a schedule to distribute $225,000 of partnership net income to the partners.

Q: Harry Markowitz is best known for his Nobel Prize-winning work on _____________. A. strategies for active securities trading B. techniques used to identify efficient portfolios of risky assets C. techniques used to measure the systematic risk of securities D. techniques used in valuing securities options

Q: For a perfect competitor, the marginal revenue curve will beA) horizontal. B) vertical.C) positively sloped. D) negatively sloped.

Q: On February 1, 2011, George, Hamm, and Ishmael began a partnership in which George and Ishmael each contributed cash of $25,000; and Hamm contributed property with a fair value of $50,000 and a tax basis $40,000. Hamm receives a 5% bonus of partnership income. George and Ishmael receive salaries of $10,000 each. The partnership agreement of George, Hamm, and Ishmael provides that all partners receive 5% interest on capital, and that profits and losses of the remaining income be distributed to George, Hamm, and Ishmael by a 1:3:1 ratio. Required: Prepare a schedule to distribute $25,000 of partnership net income to the partners.

Q: Which one of the following stock return statistics fluctuates the most over time? A. covariance of returns B. variance of returns C. average return D. correlation coefficient

Q: OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the average total cost to produce 3 units of output?A) $33.33 B) $53.33 C) $55 D) $20

Q: Dan and Ellie share partnership profits and losses at 70% and 30%, respectively. The partners agree to admit Fran into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Fran are: Dan (70%) $ 800,000 Ellie (30%) 400,000 Total $ 1,200,000 Required: 1. Prepare the journal entry(s) for the admission of Fran to the partnership assuming Fran invested $800,000 for the ownership interest, and that this is a fair price for that share of the partnership to be acquired. Fran paid the money directly to Dan and to Ellie for 50% of each of their respective capital interests. The partnership records goodwill. 2. Prepare the journal entry(s) for the admission of Fran to the partnership assuming Fran invested $1,000,000 for the ownership interest. Fran paid the money to the partnership for a 50% interest in capital and earnings. Assume the valuation is based on the capital of the current partnership, which is fairly valued. The partnership records goodwill. 3. Prepare the journal entry(s) for the admission of Fran to the partnership assuming Fran invested $1,400,000 for the ownership interest, and that this is a fair price for that share of the partnership to be acquired. Fran paid the money to the partnership for a 50% interest in capital and earnings. The partnership records goodwill.

Q: Firm-specific risk is also called __________ and __________. A. systematic risk; diversifiable risk B. systematic risk; nondiversifiable risk C. unique risk; nondiversifiable risk D. unique risk; diversifiable risk

Q: The short run is A) a year or less. B) up to three years. C) the period of time in which the firm can vary its rate of output. D) the period of time in which the firm cannot change its use of at least one input.

Q: Anna and Bess share partnership profits and losses at 60% and 40%, respectively. The partners agree to admit Cal into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Cal are: Anna (60%) $ 300,000 Bess (40%) 300,000 Total $ 600,000 Required: 1. Prepare the journal entry(s) for the admission of Cal to the partnership assuming Cal invested $400,000 for the ownership interest, and that this is a fair price for that share of the partnership to be acquired. Cal paid the money directly to Anna and to Bess for 50% of each of their respective capital interests. The partnership records goodwill. 2. Prepare the journal entry(s) for the admission of Cal to the partnership assuming Cal invested $500,000 for the ownership interest. Cal paid the money to the partnership for a 50% interest in capital and earnings. Assume the valuation is based on the capital of the current partnership, which is fairly valued. The partnership records goodwill. 3. Prepare the journal entry(s) for the admission of Cal to the partnership assuming Cal invested $700,000 for the ownership interest, and that this is a fair price for that share of the partnership to be acquired. Cal paid the money to the partnership for a 50% interest in capital and earnings. The partnership records goodwill.

Q: Market risk is also called __________ and _________. A. systematic risk; diversifiable risk B. systematic risk; nondiversifiable risk C. unique risk; nondiversifiable risk D. unique risk; diversifiable risk