Answer:
Wage Replacement Ratio = $53,000 / $100,000 = 53%
Explanation:
Total Mortgages = $1,500 x 12 = $18,000
Dollar Value Percentage
Salary $100,000 100%
Less: Self-Employment Taxes (11,000) (11%)
Less: Savings (18,000) (18%)
Less: Mortgage Payments (18,000) (18%)
$ 53,000 53%
Wage Replacement Ratio = $53,000 / $100,000 = 53%
Final answer:
Stacy's wage replacement ratio at retirement is expected to be 36%.
Explanation:
To calculate Stacy's wage replacement ratio at retirement, we first need to determine her annual Schedule C net income. If she saves 18% of her annual income, then her annual savings would be:$100,000 × 0.18 = $18,000
Next, we can calculate Stacy's mortgage pay-off amount by multiplying her monthly payment by 12:$1,500 × 12 = $18,000
Considering that Stacy has no other debts and plans to pay off her mortgage at retirement, her wage replacement ratio would be:($18,000 + $18,000) / $100,000 = 0.36 or 36%
As the Industrial Revolution came to the United States, most firms operated in a(n) ____ orientation
Answer:
Production Orientation
Explanation:
As the industrial revolution came to the United States, stringent economic conditions as a result of the period from the 1920s through the 1940s made so many organizations to fail despite the fact that they operated in a production orientation. This made companies to begin to search for other way to ensure the possibility of the exchange.
You opened a U.S. Bank's Standard Savings account in January of this year with a 3% annual interest rate but there is a monthly maintenance fee of $4, which you can get waived if you keep a $300 minimum daily balance. If you can only keep up a $250 minimum balance, are you making money or losing money in the account?
Answer:
losing money
Explanation:
A monthly maintenance fee of 4 percent translates to an annual fee of 48 percent. This means that the bank will deduct 48 percent from the deposit every year as maintenance fees. The account will be earning 3 percent per year as interest. A comparison of the 3 percent gain and 48 percent deductions, shows account is losing money. Every year, the account will lose 45 percent of the deposits.
For the account to earn money, the annual interest rate must be greater than the yearly maintenance fee. For this case, if the annual interest rate were at 12 percent and maintenance fee at 4 percent, the account would make money. In real life, an individual should also consider the inflation rate.
Answer:loosing money
Explanation: trust me
ou have just received seed money for a new e-commerce business and you want to hire a dozen people with a lot of creative potential. To hire the most creative people, you would select applicants who: select one:a. Have no experience in this industry, have high analytic intelligence, and have a relatively low need for achievement.b. Has above-average intelligence, is persistent, has subject-matter expertise, and an inventive thinking style.
To hire the most creative people for the new e-commerce business, I would select applicants who have above-average intelligence, are persistent, possess subject-matter expertise, and exhibit an inventive thinking style (option b).
Explanation:In the context of hiring for a new e-commerce business that requires creativity, selecting individuals with above-average intelligence is crucial. Intelligence is a fundamental trait linked to problem-solving abilities and innovation. Additionally, persistence is vital for overcoming challenges and pushing through creative blocks, contributing to sustained creativity over time. Subject-matter expertise ensures a deep understanding of the industry, allowing for more informed and innovative contributions. Lastly, an inventive thinking style suggests a capacity for original and novel ideas, which is essential for driving creativity in an e-commerce setting.
Choosing individuals with high analytic intelligence aligns with the need for problem-solving skills in the dynamic landscape of e-commerce. Analytic intelligence involves logical reasoning and critical thinking, attributes that are valuable for navigating complexities in the industry. On the other hand, selecting applicants with a relatively low need for achievement might hinder the drive and ambition required for success in a competitive e-commerce business. Therefore, the combination of above-average intelligence, persistence, subject-matter expertise, and an inventive thinking style provides a well-rounded approach to hiring individuals with the creative potential to contribute significantly to the success of the new e-commerce venture.
The rent for​ 2-bedroom apartments in Detroit has fallen from an average of​ $796 in September 2014 to​ $717 in March 2015. Demand for​ 2-bedroom apartments in Detroit was falling during this period as well. This is hard to explain because the law of demand says that lower prices should lead to higher demand. Do you agree or disagree? Explain your answer.
Answer:
Disagree
Explanation:
The decrease in the demand for the apartments caused the decrease in the rent price, not vice versa. When the quantity demanded of a product decreases, the equilibrium price will also decrease.
This situation was probably the result of a leftward shift in the demand curve which resulted in a decrease of both the quantity demanded and the rental price. In my opinion, this shift was probably due to a decrease in the income of people demanding rental apartments. Detroit's largest industry is the car industry, and American car manufacturers are not doing very well lately.
Ownership concentration is determined by both:________ a. the number of outside directors and total percentage of shares they own. b. the number of stockholders and the parties they represent. c. the number of stockholders and total percentage of shares they own. d. the number of outside directors and the parties they represent.
Answer:
b.
Explanation:
Ownership concentration refers to the internal governance mechanism where the owners of the company/firm/business (shareholders) can control and thus influence the direction that the company takes in order to protect their own interests. Therefore the ownership concentration is determined by both the number of stockholders and the parties they represent.
Ownership concentration refers to the number of shareholders and the total percentage of shares they own in a firm. The governance structure of a company helps ensure it's run in the best interest of the shareholders. However, in practice, top executives often have a significant role in choosing board member candidates.
Explanation:Ownership concentration in a firm is determined by the number of shareholders and the total percentage of shares they own (option c). For instance, in a public company, the firm is owned by shareholders who buy and sell stock. These shareholders, who can number in the thousands or even millions, elect a board of directors to manage the firm. The more stock a shareholder owns, the more votes they have in electing the board of directors.
It's important to note that the company's governance structure ensures the firm is run in the interest of the shareholders (the true owners). However, the top executives usually have a significant role in choosing the candidates for the board members. This is largely because most shareholders may not have sufficient knowledge or incentives to nominate alternative board members themselves.
While we have talked about public companies, it's worth mentioning that private companies can also have concentrated ownership. These are often owned and run by individuals or a group.
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Refer to Scenario 15.1. The campaign was so successful that Rick decided to host a special event to announce the winner. On the day of the event he invited the media to film the event. The CEO of the firm named the finalists and then called out the winner. This all occurred with much fanfare. An illustration of the proposed product with a short description was provided to reporters to publish in the paper. This campaign is an example of _____________________.
Answer: Public relations
Explanation: Public relations is the technique of maintaining the dissemination of information deliberately between an individual or group of individuals and the citizenry.
Public relations may include a company or person that uses subjects of public interest and media articles that do not involve direct payment to be exposed to their audiences.
In The given case, Rick was intentionally using media sources for making people aware and interested towards his project. Hence we can conclude that the given case is an example of public relations.
How much total deferment time are you allowed over the life of your loan?
Answer:
depends solely on the type of deferment that you are applying for
Explanation:
Since deferment time is in regards to student loans then we can say that, in student loans depends solely on the type of deferment that you are applying for. The two most common types of deferments are based on financial hardship or unemployment. These two types of deferments allow you to defer only three years
Will and Grace have adjoining unfenced back yards and each has just adopted a new puppy. Will values a fence between their yards at $250 and Grace values a fence between their yards at $200. The cost of building the fence is $300, which will be split equally if they both agree to build the fence. Therefore, their payoff matrix is as follows.Will's dominant strategy in this game is to:
Answer:
Not build the fence
Explanation:
If Will decides to build the fence, then Grace will earn a higher payoff by not helping to build the fence, and if Will decides to not build the fence, then Grace will earn a higher payoff by also not building the fence.
Equilibrium = No fence
Final answer:
Will's dominant strategy is not to build the fence.
Explanation:
In this game, Will and Grace have two strategies: either build the fence or not build the fence. Will's dominant strategy is to not build the fence. This is because if he chooses to build the fence, he would have to pay $150 (half of the total cost) and his payoff would be -$100 (his valuation of the fence is -$250).
On the other hand, if he chooses not to build the fence, he would have a payoff of $0 (his valuation of the fence is $0). Grace will receive a larger payout if Will chooses to build the fence rather than assist with its construction, and she will receive a bigger payout if Will chooses not to build the barrier. Therefore, his dominant strategy is to not build the fence.
Entries for Issuing Bonds
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $900,000 of 10-year, 7% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
Dec. 31. Recorded accrued interest for two months.
Journalize the entries to record the above selected transactions for the current year.
May 1
Nov. 1
Dec. 31
Answer:
See journal entries in explanation below.
Explanation:
May 1. Issued the bonds for cash at their face amount
Debit Cash Account $900,000
Credit Bond Account $900,000
Nov 1. Paid the interest on the bonds
Debit Interest on Bond Account $31,500 (900,000 * 7% * 6/12)
Credit Cash Account $31,500
Dec 31. Recorded accrued interest for two months
Debit Interest on Bond Account $10,500 (900,000 * 7% * 2/12)
Credit (Bond Interest) Accrual Account $10,500
Thomson Co. issued $900,000 of 10-year, 7% bonds on May 1. The journal entries for issuing the bonds, paying the interest, and accruing interest for two months are provided.
Explanation:The journal entries for the selected transactions are as follows:
May 1:
Cash 900,000
Bonds Payable 900,000
Nov. 1:
Interest Expense 31,500
Cash 31,500
Dec. 31:
Interest Expense 21,000
Interest Payable 21,000
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to recieve a 14% return on an investment of 500,000 what would be the required net operating income of the purchased property?
Answer:
70000
Explanation:
Investment = 500000 .00
expected ROI = 14%
ROI = (Operating income / investment ) x 100
operating income = ( ROI x investment )/ 100
= 14 x 500000/100
= 70000 . Ans
A customer invests 50000. 10 years later, the investment is worth 100000. the customers annual compouned rate of return is?
Answer: The rate of interest is 7.18 %
Explanation:
To calculate the rate of interest, we use the equation used for the interest compounded monthly follows:
[tex]A=P(1+\frac{R}{n})^{nT}[/tex]
A = Amount after time period 'T' = $100,000
P = Principal amount = $50,000
R = rate of interest = ?
n = Number of times interest applied per time period = 1 (annually)
T = time period = 10 years
Putting values in above equation, we get:
[tex]100,000=50,000(1+\frac{R}{1})^{1\times 10}\\\\R=0.0718[/tex]
Calculating the rate of interest in percentage:
[tex]\Rightarrow R\times 100=0.0718\times 100=7.18\%[/tex]
Hence, the rate of interest is 7.18 %
Justin agrees to start a life-size portrait of Julia beginning November 2. On October 28 he writes to Julia that due to unforeseeable circumstances, he would not be able to perform his promise. Justin has used the doctrine of: quasi-contract. accord and satisfaction. specific performance. anticipatory repudiation.
Answer:
anticipatory repudiation.
Explanation:
Anticipatory repudiation refers to a party involved in a contract breaching the contract in advance. Through the use of anticipatory repudiation, the party that is breaching the contract declares that they are not going to perform their obligations.
In order to reduce possible damages and avoid potential losses, the party that breaches the contract has to act as quickly as they can so that the other party suffers the least possible damage or suffers the least possible losses. But still, the other party can sue for the breach of the contract and for any potential damages originated by the contract breaching.
Foster enters into an agreement with Grab n' Eat Burgers, Inc., to operate a franchise in Home Town. Later, Grab n' Eat grants franchises to others within the same territory, causing Foster to suffer a significant loss in profits. In Foster's suit against Grab n' Eat, Foster's best argument is that the franchisor
a. violated the implied covenant of good faith and fair dealing.
b. charged Foster a franchise fee.
c. violated the antitrust laws.
d. granted Foster the first Grab n' Eat franchise in Home Town
Answer:
a.
Explanation:
Based on the information provided within the question it can be said that Foster's best argument is that the franchiser violated the implied covenant of good faith and fair dealing. This covenant is a presumed agreement that both parties that enter a contract will be honest, fair, and will conduct everything in good faith. Which Grab n' Eat has not done since they purposely granted franchises to others in the same area knowing the negative effect it would have on Foster.
The correct choice is A. Foster's best argument is that Grab n' Eat violated the implied covenant of good faith and fair dealing by granting additional franchises in his territory, causing significant financial loss.
The correct choice is A . Foster's strongest argument in a lawsuit against Grab n' Eat Burgers, Inc., is that the franchisor violated the implied covenant of good faith and fair dealing. This covenant is an obligation inherent in all contracts, ensuring that both parties act honestly and fairly toward one another. If Grab n' Eat granted additional franchises in Foster's territory without consideration of Foster's interests and potential profit losses, it can be seen as an act of bad faith which breached their agreement.
When the Federal Reserve extends a discount loan to a​ bank, the monetary base​ ________ and reserves​ ________. A. remains​ unchanged; increase B. ​increases; remain unchanged C. remains​ unchanged; decrease D. ​increases; increase
Answer:
D. increases; increase
Explanation:
This is the payment of loan interest and other charges upfront at the time of obtaining a loan facility. The loan charges are always deducted from the principal at the time of loan disbursement,
When the Federal Reserve extends a discount loan to bank, it increases the monetary base which is the sum of currency in circulation held by the public and the amount held by banks as reserves, and the reserve which is held by the Federal Reserve will also increase.
Let's practice Channels and MCF analysis by going to the Google Merchandise Store demo account with a date range of Feb 1, 2016 - Feb 29, 2016 to answer the following questions: Under Acquisition in the All Traffic > Channels report, using a Custom Segment for users who had a landing page that contains "Android", what is the Ecommerce Conversion Rate for users brought in by the Paid Search channel? 1.00% 1.16% 1.18% 1.36%
Answer:
1.00%
The E-commerce Conversion Rate for users brought in by the Paid Search channel is 1.00%
The Ecommerce Conversion Rate for users brought in by the Paid Search channel is 1.00%
To obtain the Ecommerce Conversion Rate for users brought in by the Paid Search channel with a Custom Segment for landing pages containing "Android," you would need access to the Analytics account and perform the following steps:
Log in to your Analytics account.
Set the date range to Feb 1, 2016 - Feb 29, 2016.
Navigate to the "Acquisition" section.
Click on "All Traffic" and select the "Channels" report.
Apply a Custom Segment for users with landing pages containing "Android."
Find the "Paid Search" channel in the report.
Look for the Ecommerce Conversion Rate for this specific channel and segment.
The correct Ecommerce Conversion Rate can be found within Analytics once these steps are taken, and it will correspond to 1.00%
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Quizno's is conducting a contest in which customers are asked to name a new sandwich. The winner gets a free sandwich each day for one year and an appearance in one of the company's TV commercials. This contest illustrates Quizno's use of the ____ elements of the promotion mix.
Answer:
sales promotion
Explanation:
Sales promotions are used as a short term tactic to increase the sales of a good or service very rapidly, but they are not meant to last. Usually sales promotions offer product or monetary incentives to but the goods or services, e.g. discounts, rebates, coupons, free samples, contests, extra product, etc.
Final answer:
Quizno's contest is a part of their promotion mix, combining both sales promotion and advertising to engage customers and promote the brand.
Explanation:
Quizno's contest to name a new sandwich, where the winner receives a free sandwich each day for a year and an appearance in a TV commercial, illustrates Quizno's use of the promotion mix elements, particularly sales promotion and advertising. Sales promotion is represented through the contest which is a short-term incentive to entice customers to engage with the brand. Advertising is highlighted by the prize of appearing in a TV commercial, which promotes both the brand and the contest itself.
In the circular flow of economic activity, there are two kinds of markets in which firms and households interact. In the factor market:___________
Answer: Goods and the services are exchanged
Explanation:
The circular flow of the economical activity is refers to the various types of economical relationship in the market economy and the money and the wages are the form which is basically used for purchasing the products and the services.
In the given factor market the various types of products and the services are get exchange by the interaction of organization and the household. It is also helps for calculating the specific national income.
Therefore, Goods and the services are exchanged is the correct answer.
Which of the following resource management key activities defines and categorizes incident resources by capability?
Answer:
Identifying and Typing Resources
Explanation:
NIMS Resource Management is important because in case an incident happens, you need to get the right resources to the right place and at the right time in order to preserve the life and well being of the residents.
Resource management includes four key activities:
Identifying and typing resources : resources must be inventoried and categorized based on capability, category, kind and type.Qualifying, certifying, and credentialing personnel Planning for resources Acquiring, storing, and inventorying resourcesResource Typing is the key activity in resource management that defines and categorizes incident resources by capability.
Explanation:The key activities that define and categorize incident resources by capability in resource management are known as Resource Typing.
Resource Typing is the process of identifying, organizing, and classifying resources based on their inherent characteristics, capacities, and capabilities. By doing so, resource typing ensures that the right resources are assigned to the right incidents, based on their suitability and effectiveness.
For example, in a firefighting operation, resource typing would involve categorizing fire engines, firefighters, helicopters, and other equipment based on their capacity to combat different types and sizes of fires. This helps incident managers to deploy the most appropriate resources for each specific incident, optimizing their effectiveness and minimizing the risks.
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As the "central bank" for the United States the _________________ is the primary manager of the money supply.
a. U.S. Mint
b. Bureau of Engraving
c. U.S.Treasury
d. Federal Reserve
e. Federal Reserve
Answer: (D) Federal reserve
Explanation:
In the united states, the federal reserve is basically created by the congress in the year 1913 for providing the financial system and also the stable monetary and it is basically refers as the central banking system.
According to the question, the federal reserve is works as the primary manager in the form of Central bank in the united state for the purpose of money supply.
The main function of the federal reserve is that it basically regulated the financial institutions and also managing the nation's economy and the interest rate. Therefore, Option (D) is correct.
Many people believe that because wages are lower in developing countries than in developed countries, competition from developing countries in goods traded internationally will soon eliminate large numbers of jobs in developed countrie.
The given statement is true.
Explanation:
Many believe that the competition between development countries and internationally-traded goods soon eliminates large amount of jobs in developed countries as wages are lower in developing nations than in developed countries.
Today, modern technology in developed nations leads to higher productivity, which represents a higher payroll.
Even with the newest technology, production and wages in developing nations will stay lower for decades than in the developed nations, because developing nations have better infrastructure and better trained workers. More technological developments are being transported ever quicker over borders.
Cyclical unemployment:_________
A.occurs even when an economy is producing at a point on its production possibilities frontier.
B.occurs only during a recession.
C.tend to occur when an economy experiences inflation.
D.is a part of an economy's natural rate of unemployment.
Answer: Occurs only during a recession.
Explanation:
Cycling unemployment is a kind of unemployment where company lay-off workers because they can't meet up with their payments: as a result of a general drop in the demand for goods and services in the economy of country.
Cyclical unemployment are very common in recessions as companies then massively drop workers in their establishment due to general low economic activities.
Stonybrook Organics—famous for its organic yogurt—came out with an advertisement that showed an idyllic setting of a cow resting comfortably in front of a barn. The headline read, "Grant a Farmer's Wish." The Stonyfield logo was at the top left. This is most likely to be what type of advertising? a. Pioneer advertising b. Institutional advertising c. Competitive advertising d. Product advertising e. Comparative advertising
Answer: institutional advertising
Explanation: Institutional advertisement, also known as corporate advertising, is any kind of advertising supporting a company, corporation, institution or similar entity.
The corporation is marketing itself rather than its brand in corporate advertising. The thing to keep in mind here, nevertheless, is that organizational marketing is not meant to specifically sell something.
Instead, it attempts at creating a business identity and building respect for the company and educating customers about the organization's ideology. It mostly tells the public at large about the institution's work in the fields of wellness, schooling, climate, and other similar fields and attempts to build the company's reputation.
Memorial Hospital is a 45-bed rural hospital. The last two directors of HIM stayed less than six months each, and the position has been open for four months.
____________ recruitment methods should the chief financial officer (CFO) consider to fill the open HIM director position.
Question: Memorial Hospital is a 45-bed rural hospital. The last two directors of HIM stayed less than six months each, and the position has been open for four months. Which recruitment method should the chief financial officer (CFO) consider to fill the open HIM director position.
Answer: Outsourcing recruitment method.
Outsourcing recruitment is a process of finding candidates for a job position by using an external recruiter.
This method is one of the best and has many advantages in that it provides a pool of the best candidate and eventually selects the best of the best; it is a relatively cheap means of recruitment; it saves time and resources; etc
Answer: Outsourcing
Explanation:
Outsourcing is the practice of contracting out responsibilities to an entity that is not part of an organization to perform certain services or handle some processes. Such task is handled and performed differently from the normal way the organization handles it. Example of such services includes conducting a recruitment process, creating a good, project planning etc.
Outsourcing helps an organization to save cost, improve efficiency and achieve effectiveness. It also provides fast service and reduces time wasting.
Using outsourcing as part of a business strategy started in 1989, although it is regarded as a controversial form of business strategy in most countries because it is perceived to cause or lead to job loss.
Types of Outsourcing includes.
•Process outsourcing.
•Project outsourcing.
•People outsourcing.
Which business model sells goods or services to buyers who then resell or use them for business purposes?
The _______sell goods or services to buyers who then resell or use them for business purposes.
Answer:
wholesalers, distributors and manufacturers.
Explanation:
The wholesalers, distributors, and manufacturers trade goods or services to consumers, which then resell or utilize them for trading persistence. Resellers purchase goods in a large amount from other companies such as wholesalers, distributors, and manufacturers. Later they trade the singular factors to purchasers, at a favorable cost. Thou won’t gain enough hype throughout reselling. That’s the conventional method of retailing, which we distinguish from most utmost huge mall storehouses autonomous independent online stores.
Answer:
distributors
Explanation:
Interest group influence is particularly strong among ______ agencies that are responsible for overseeing the nation's business sectors.
Answer: The correct answer is "regulatory".
Explanation: Interest group influence is particularly strong among regulatory agencies that are responsible for overseeing the nation's business sectors.
Regulatory agencies are those that control or supervise the business sector of nations.
Jean-Paul, the store manager, was speaking with Patty, his new assistant manager, about the store's system of job relationships and whom she will report to and who will report to her. He said, "This structure is one of the things that motivates our workers to work together to achieve our company's goals." Jean-Paul was telling Patty about the store's _____.
A.) code of ethicsB.) analyticsC.) organizational cultureD.) diversity planE.) organizational structure
Answer: C.) organizational culture.
He was explaining the principles the organization runs by.
Explanation: Organizational culture are the values and belief system an organization imbibes or run with, they are principles an organization adopts that puts them in order, put them under checks and keeps them in business. Few characteristics of organizational culture includes
•Stability
•Detailed.
•Aggressive
•Income Oriented.
•Team supportive etc.
You are a solutions architect working for a large travel company that is migrating its existing server estate to AWS. You have recommended that they use a custom Amazon VPC, and they have agreed to proceed. They will need a public subnet for their web servers and a private subnet in which to place their databases. They also require that the web servers and database servers be highly available and that there be a minimum of two web servers and two database servers each. How many subnets should you have to maintain high availability?
A. 2
B. 3
C. 4
D. 1
Answer:
C. 4. Subnets
Explanation:
You need two public subnets (one for each Availability Zone) and two private subnets (one for each Availability Zone). Therefore, you need four subnets.
Final answer:
To maintain high availability in the AWS environment, you should have a total of four subnets - two public subnets for the web servers and two private subnets for the database servers.
Explanation:
To maintain high availability in the AWS environment, you should have a total of four subnets. This includes two public subnets for the web servers and two private subnets for the database servers.
Having multiple subnets allows you to distribute your resources across different availability zones (AZs) for redundancy. AWS recommends using multiple AZs to ensure high availability and fault tolerance.
By spreading your infrastructure across multiple subnets and AZs, you can avoid a single point of failure and minimize the impact of any failure on your overall system. With four subnets, you can achieve resilience and redundancy for both your web servers and database servers.
Which of the following terms is NOT specifically defined under the Uniform Securities Act?A) Broker-dealerB) Broker-dealer representativeC) Investment adviserD) Investment adviser representative
Answer:
B. Broker-dealer representative.
Explanation:
The Uniform Securities Act defines a broker-dealer, it defines a representative of a broker-dealer, it defines an investment adviser, and it defines an investment adviser representative. So Overall, the term not specifically defined under the securities act is broker-dealer representative.
The term that is NOT specifically defined under the Uniform Securities Act is Broker-dealer representative.
Explanation:In the Uniform Securities Act, the term that is NOT specifically defined is Broker-dealer representative. The Act specifically defines the terms Broker-dealer, Investment adviser, and Investment adviser representative. A broker-dealer is a company that helps individuals buy and sell stocks, and the broker-dealer representative is an individual who acts on behalf of the broker-dealer.
An investment adviser provides advice about investing in securities, and the investment adviser representative is an individual who acts on behalf of the investment adviser.
Suppose that Rich and Sheri each own the two largest helicopter tour companies at the Grand Canyon. If each uses a pricing strategy that leads to a prisoner’s dilemma, what would be the result?a) Both Rich and Sheri would earn higher profits.b) Rich and Sheri would be better off by not cooperating with each other.c) Tourists would end up paying a lot more for helicopter tours.d) Tourists would end up receiving great deals for helicopter tours.
Answer:
D) Tourists would end up receiving great deals for helicopter tours.
Explanation:
A prisoner's dilemma is a paradox formulated by Merrill Flood and Melvin Dresher. It refers to a situation where two competing individuals (or businesses) should cooperate in order to obtain the best possible results, but they do not cooperate because they lack incentive to do so.
When competing individuals do not cooperate with each other, other people will benefit. In this case since Rich and Sheri will not cooperate with each other, their customers will benefit. In order to win more clients, Rich may start to lower the price of his tours, and eventually that will force Sheri to lower her prices in order to not lose clients. At the end, their customers will benefit because they will pay lower prices.
One of your customer accounts is a trust account. The trustee of the trust is inexperienced in investing.
As his broker, you should explain to the trustee that under the Uniform Prudent Investor Act he has a duty to invest the trust assets "prudently" which includes:
A. The duty to diversify the trust portfolio to reduce risk
B. The duty to monitor the performance of the portfolio
C. The duty to minimize costs
D. All of the above
Answer:
A) The duty to diversify the trust portfolio to reduce risk
Explanation:
The Uniform Prudent Investor Act (UPIA) requires trustees to make investments following the Prudent Person Rule. This means that trustees should invest the trust funds as if the trustee was a prudent person investing his/her own assets.
The best way to comply with the prudent person rule is to invest in a diversified portfolio that reduces risk.