adjust our opinion. 3. If you “buy straw hats in winter” or buy “when there is blood in the street‚” what kind of investor are you? 10-3. You are a contrarian because you buy things when they are out of favor hoping that you got a bargain. 4. How does prospect theory differ from standard economic utility theory? 10-4. If people were rational utility theory would work fine and they would choose the highest probable outcome from a list of outcomes that have the same risk. However when people
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to the Best Explanation is a type of abductive reasoning. In making this inference one infers‚ from the fact that a certain hypothesis would explain the evidence‚ to the truth of that hypothesis. In general‚ there will be multiple different hypotheses that might explain the evidence‚ so one must be able to decide which one is the correct hypothesis. One of the classic examples is how to explain wet grass. If the grass is wet‚ it probably rained. The Inference of the Best Explanation‚ one does not
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considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firm’s cost of capital is 15%. a. Calculate the net present value (NPV) of each press. b. Using NPV‚ evaluate the acceptability of each press. c. Rank the presses from best to worst using NPV. PERSONAL FINANCE PROBLEM P9–11 Long-term investment decision‚ NPV method Jenny Jenks has researched
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they did not plan on‚ such as a higher-than-expected increase in the cost of materials. The business also uses these techniques to check that people are paying as they should and that the funds are used for their original intent—that is‚ it prevents payment loss and heightens financial and overall operational accountability. These strategies influence cash flow‚ as well‚ making it more likely that the business will have the funds it needs at the right time. Considering an example of Dimensional Info
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corporate business structure In today ’s competitive business environment‚ your choice of corporate structure could affect your business ’ long term success. A business entity can be structured in three ways‚ that being a sole trader‚ partnership or a company. Sole traders carry on business alone‚ thus leaving the owner with complete control of the enterprise and its employees‚ ownership of all profits‚ business assets and personal responsibility for all debts. It is the simplest business structure
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Revised Behavior Explanations Patricia Landeros Psychology 100 TTh 11:00-12:15PM April 7‚ 2011 BEHAVIOR EXPLANATION # 1 1. Behavior Observation/Description (5pts) One hot September day at around one o’clock‚ my boyfriend‚ Jonathan and I were strolling around the city of Downey‚ searching for a delicious place to have lunch. We then made the decision to grub at In n’ Out. As we walked down Firestone‚ I noticed an elderly man attempting to illegally cross the street. I was beginning to
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Business Financing and the Capital Structure Business Financing and the Capital Structure Pamela D. Forbes Strayer University Dr. John Karaffa December 01‚ 2013 Business Financing and the Capital Structure Data gathering‚ planning‚ preparing‚ presenting‚ implementing and the on-going monitoring
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Question 1 Call options on XYZ Corporation’s common stock trade in the market. Which of the following statements is most correct‚ holding other things constant? Answer Correct Answer: The price of these call options is likely to rise if XYZ’s stock price rises. Question 2 Other things held constant‚ the value of an option depends on the stock’s price‚ the risk-free rate‚ and the Correct Answer: All of the above. Question 3 Which
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$5‚000 b. What are the earnings after interest for each firm? Firm A: Interest=0 So Earnings after tax=$5‚000 Firm B: Interest=10‚000X.10 Means Earnings after tax=$4‚000 c. What is each firm’s Return on Equity? (calculate ROE based on earnings after interest … assume no income tax) Firm A: $5‚000/$20‚000=25% Firm B: $4‚000/$20‚000=20% Assume sales increase by 10% (to 33‚000 units) d. What are the earnings after interest for each firm with the increased sales? Sales revenue for both
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Organizational structure at Oxford Brookes An Organization must have to be structured for its better and proper functioning. The structure of the organization defines the roles and activities required of people in order to meet the goal and objectives of the organization‚ by the better division of work. The structure of the organization creates a mutual relationship between various members of various positions among the organization. The structure should also help people accomplish their
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