B.Maria is more risk-averse than Jennifer because Maria is choosing a bond with lower volatility of its expected return.
C.There is not enough information to tell. In order to decide whether Maria or Jennifer is more risk averse, one will need to compare two bonds with the same expected return and different standard deviations of their expected returns.
Answer: The correct answer is "A.Maria is less risk-averse than Jennifer because Maria is choosing a bond with higher standard deviation.".
Explanation: We can measure the risk according to the standard deviation of its expected return, therefore: Maria is less risk averse because she is willing to take more risk in order to obtain a higher return and Jennifer instead prefers to sacrifice performance in order to be less exposed to risk.
Maria is less risk-averse than Jennifer because she chooses a bond with a higher expected return and a higher standard deviation, indicating a willingness to accept more risk.
This question involves the concepts of expected return and risk associated with investments, particularly bonds. Risk-aversion is the degree to which an investor prefers lower risk when investing. Maria, who prefers a bond with a 7% expected return and a 2% standard deviation, is displaying characteristics of being less risk-averse than Jennifer, who prefers a bond with a 4% expected return and a 1% standard deviation. This is because a higher standard deviation indicates a higher degree of risk, which Maria is willing to accept for the potential of a higher return.
Therefore, the correct answer is A. Maria is less risk-averse than Jennifer because Maria is choosing a bond with higher standard deviation.
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Answer:
The sale results in an ordinary loss of $100,000 and long-term capital loss of $25,000.
Explanation:
Stacy, who is married and sole shareholder of ABC Corporation, sold all of her stock in the corporation for $100,000. Stacy had organized the corporation in 2009 by contributing $225,000 and receiving all of the capital stock of the corporation. ABC Corporation is a domestic corporation engaged in the manufacturing of ski boots. The stock in ABC Corporation qualified as Sec. 1244 stock. The sale results in AN ORDINARY LOSS OF $100,000 AND LONG-TERM CAPITAL LOSS OF $25,000.
Answer:
ordinary loss of $100,000 and long-term capital loss of $25,000
Explanation:
Up to $100,000 on a joint return of loss realized on disposition of Section 1244 stock is treated as an ordinary loss. So the first $100,000 would be ordinary and the remaining $25,000 would be a LTCL.
Answer:
Fee simple subject to a condition subsequent
Explanation:
A fee simple subject to a condition subsequent is quite similar to the fee simple determinable besides that the violation of the condition would give the original owner the option to take back the property. Therfore , the property does not automatically shift to the original owner. Instead, upon violation of the condition, the original owner has the option to regain the right to the property. This option is called a "right of reentry."
Answer:
Total expenses 936,500
depreciation 291,500
wages expense 645,000
Explanation:
Assuming the depreciation are calculate base on straight line or that their output is lineal through the year:
It will be half of the depreciation for the year.
583,000 / 2 = 291,500 depreciation expense for six-month
For the year-end bonused It wll be the same ideal, we assume are earned equally during the year. So at half year half of the bonuses should be earned:
wages expense 1,290,000/2 = 645,000
Total expenses 936,500