Answer:
This is false.
Explanation:
Diversification is An investment strategy that includes a mixture of a wide variety of investments from different categories within a portfolio.
A well diversified portfolio does not need 3 to 5 stocks from different categories instead A well-diversified portfolio needs about 20-25 stocks from various categories.
Answer:
The correct answer is Sin tax.
Explanation:
A sin tax is a state-sponsored tax that is added to products or services that are considered vices, such as alcohol, tobacco and gambling. These types of taxes are collected by governments to deter individuals from participating in such activities without making the use of the products illegal. These taxes also constitute a source of revenue for the government.
Solution:
Annual coupon payment of the bond is $80
At the beginning of the year, remaining maturity period is 2 years.
Price of the bond is equal to face value, i.e. the initial price of the bond is $1000.
New price of the bond = present value of the final coupon payment + present value of the maturity amount.
New price of the bond =
where, r is the yield to maturity at the end of the year.
Substitute 0.06 for r in the above equation,
Therefore new price of the bond is =
=
= $ 1010.87
Calculating the rate of return of the bond as
= 0.09887
Therefore, the rate of return on the bond is 9.887%
≈ 10 %
Answer: highlight the different level of activities
Explanation:
Activity Based Costing system assigns costs to the activity that are used in production and it highlight the different level of activities.
Activity based costing system is quite different from the traditional costing systems based on the way the indirect cost is being treated.