Answer: (C).
The second plan is an example of an "operating plan".
Explanation:
An operating plan is a detailed plan that breaks down a long-term strategic plan to be implemented over several years, into smaller units that can be achieved within shorter periods (such as one year).
Within the period allocated to the operating plan, weekly and monthly targets are set, and short term objectives are developed. Processes are then put in place and resources are deployed towards meeting these targets and objectives.
Once targets are met, then the next phase of the long term plan is acted upon.
All of this is done with the main purpose of achieving the long term organizational goals and objectives.
Therefore, the 12-month plan set up by the management of Computer Rescues, Inc. is an "operating plan".
Answer:
C) operating
Explanation:
operating
The operating plan is scheduled generally for a 12 month period, it identifies important targets such as market share, cash flow and revenues and it defines a business conduction strategies based on the action plan
At today's rate of consumption, the world's known reserves of tantalum will last about ________ more years, but if everyone in the world began consuming tantalum at the rate of U.S. citizens, then it would last for only ________ years.
Answer:
200 more years15 yearsExplanation:
Tantalum is a metal used to manufacture electronics such as cell phones, computers and digital cameras. The problem with tantalum is that it is found in coltan ore, which is mostly mined in Africa. The African country with the largest tantalum exports is Congo, a country devastated by continuous civil wars. Millions of people have been killed in these civil wars and the warlords control coltan mines.
One path for achieving self-actualization was through the attainment of __________.
a. gratification of the id
b. peak experiences
c. desired reinforcers
d. gratification of the superego
Answer:
b. peak experiences
Explanation:
One of the most important concepts in organizational psychology is Maslow's hierarchy of needs. The highest level in the pyramid (visual representation of the hierarchy) belongs to the self-actualization needs, coming after physiological, safety, social belonging and self-esteem needs, in that specific order.
Given that self-actualization is the highest level of psychological development, it is associated with the attainment of peak experiences, which are unique for each individual, but always represent an excited mental state during the experiences, events, activities when the individual reaches full potential. It is synonymous with the flow state, a nearly euphoric stage when we engage with activities bringing us nearer to reaching our ultimate goals (ambitious business goals, innovating something, creating a piece of art...).
In considering NBAC’s analytic approach, an otherwise competent person who is acutely ill might be considered at especially high risk of harm for______.
a. Capacity-related cognitive vulnerability
b. Communicative vulnerability
c. Situational cognitive vulnerability.
d. Economic vulnerability
Answer:
c. Situational cognitive vulnerability.
Explanation:
Situational cognitive vulnerability -
It is the cognitive vulnerability in the field of cognitive psychology , it is the belief of cognitive bias .
It is the situation that does not allow to exercise the capabilities effectively .
hence , from the question ,
The correct term according to the statement of the question is - c. Situational cognitive vulnerability.
A corporation distributes a piece of personal property to a shareholder, in complete liquidation. The corporation had a basis of $40,000. The property's FMV is $30,000. The effect to the corporation is_____________.
Answer:
The corporation must recognize a $10,000 loss.
Explanation:
The last activity that a corporation must perform upon liquidation is to distribute property, assets or cash to its shareholders. The adjusted basis for any property or assets handed out in a complete liquidation is the fair market value of the property or assets.
In this case, the corporation's property had a basis of $40,000 but a fair market value of $30,000, so the distribution was done using the fair market value of $30,000.
Rita has just received a major order from Northrop Corporation for her firm's hydraulic lift equipment. After reviewing the order information, Rita willA. send an acknowledgment that the order has been received.B. proceed to vendor analysis.C. submit a competitive bid.D. rewrite her firm's proposal.E. evaluate performance.
Answer:
A) send an acknowledgment that the order has been received.
Explanation:
Under UCC rules, contracts for the sale of products or services worth $500 or more have to be in writing and signed. Instead of a signed contract, a company can accept a written offer (e.g. by email), but it should send a written acknowledgment that the order has been received and accepted (or rejected). This way, both parties have a duty to perform.
Melissa is the Executive Director of a local food bank and is assessing the financial situation of her not-for-profit organization. Melissa uses a(n) _____ to determine whether revenues from contributions and other sources will cover operating costs.a. Statement of cash flows
b. Income statement
c. Balance sheet
d. Accrual accounting
Answer:Option B
Explanation:
Income statement is used to access the Financial performance of all organizations which makes it the most suitable answer for the question.
Which of the following would be included in the gross national product (GNP) of the United States?A. Production from an Hungarian citizen who works in Denver, CO.B. Production from a U.S. firm that operates in Mexico.C. Production from a Canadian firm that operates in Montana.D. All of the above are included in the GNP of the U.S.
Answer:
B. Production from a U.S. firm that operates in Mexico
Explanation:
GNP is the sum of all final goods and services produced by a country's nationals in a given year.
In the calculation of GNP, production of foreign residents are excluded. Therefore, Production from an Hungarian citizen who works in Denver, CO and Production from a Canadian firm that operates in Montana would be excluded.
Only production from US nationals irrespective of where the production takes place would be included.
I hope my answer helps you.
Vertical integration appears particularly advantageous when the organization has:
a. a very common, undifferentiated product.
b. purchases that are a relatively small percent of sales.
c. a very specialized product.
d. little experience operating an acquired vendor.
e. a large market share.
Answer and Explanation:
e. a large market share.
The correct option is c. Vertical integration appears particularly advantageous when the organization has a very specialized product.
Vertical integration is a strategy where a company expands its operations to include different stages of production or distribution within its organizational structure. This approach is often beneficial when the company has a very specialized product for several reasons:
1. Control Over Production: When a product is highly specialized, the company may find it difficult to locate suppliers that can meet its specific needs. By integrating vertically, the company can ensure that the components or materials required for its specialized product are produced to its exact specifications.
2. Protection of Proprietary Knowledge: Specialized products often involve proprietary technology or processes. Vertical integration helps protect this intellectual property by keeping critical aspects of production in-house, reducing the risk of imitation or intellectual property theft by external suppliers.
3. Efficiency Gains: Specialized products may require unique manufacturing processes or equipment. By vertically integrating, a company can optimize these processes for its specific needs, leading to greater efficiency and potentially lower costs.
4. Quality Control: With a specialized product, maintaining high-quality standards is crucial. Vertical integration allows the company to have direct oversight of the quality of inputs and the production process, ensuring that the final product meets the desired quality levels.
5. Supply Chain Security: Relying on external suppliers for specialized components can pose a risk if those suppliers face disruptions. Vertical integration secures the supply chain, reducing the likelihood of production delays due to supply issues.
The other options do not align as strongly with the advantages of vertical integration:
a. Very common, undifferentiated product: Vertical integration may not be as advantageous for common products because there is less need for control over specialized production processes or protection of proprietary knowledge.
b. Purchases that are a relatively small percent of sales: If purchases represent a small portion of sales, the potential benefits of vertical integration in terms of cost savings or supply chain control may not justify the investment and complexity of integrating these operations.
d. Little experience operating an acquired vendor: Lack of experience can be a significant disadvantage in vertical integration. If a company does not have the expertise to manage the newly acquired stage of production, it could lead to inefficiencies and management challenges.
e. Large market share: While having a large market share might provide the resources and scale necessary for vertical integration, it does not inherently make vertical integration more advantageous. The decision to vertically integrate should be based on strategic considerations related to the product and market conditions, not just market share.
When evaluating advertising results, what post testing technique can be used to measure consumer's beliefs or feelings about a product before and after exposure to the ad?A. estimonials.B. Attitudinal measures.C. Unaided recall.D. Fear appeals.E. Aided recall.
Answer:
The correct answer is B that is Attitudinal measures.
Explanation:
Attitudinal measures is the one which evaluates the importance of the consumer places on the specific attributes of the services or the products.
It is done through surveys and created to measure how consumer feels regarding something.
In order to evaluate the advertising results, the attitudinal measures technique could be used for measuring the feelings and the beliefs of a product after or before the advertisement.
Electrowhip, a company that manufactures blenders and electric whisks, has decided to use a market-penetration pricing strategy. Which of the following, if true, proves their decision to be a wise one?
a. Electrowhip's competitors utilize social media for marketing their products.
b. Electrowhip sells products whose image and quality support high prices.
c. Electrowhip operates in a market with many competitors.
d. Electrowhip does not operate in a price-sensitive market.
e. Electrowhip's products are intended to appeal to the elite in society.
Answer:
The answer is C. Electrowhip operates in a market with many competitors.
Explanation:
First, let re-visit to the penetration pricing strategy definition. It is the strategy where price is set low so that firm can gain market share as quick as possible on the selling point of low price.
With the above definition, a. is not relevant, b. is not correct, d. is not correct because if the market is not price-sensitive, the low price will not be the selling point for them to gain market share, e. is not correct as low pricing is not an appropriate strategy to approach elite level.
With C, when there are many competitors in the market and Electrowhip is unable/ unwilling to design a unique product toward a pre-determined sub-section in market share, penetration pricing strategy seems to be the most appropriate strategy for Electrowhip.
Suppose a country reduces restrictions on how many hours people can work. If reducing these restrictions increase the total number of hours worked in the economy, but all other factors that determine output are held fixed, then
a) productivity and output both rise.
b) productivity rises and output falls.
c) productivity falls and output rises.
d) productivity and output fall.
Answer:
The correct answer is option c.
Explanation:
If the restrictions on working hours are removed such that keeping other factors constant, the total number of hours worked increases. This will cause the total output to increase.
But the workers will not be able to work efficiently for longer hours. This will cause productivity to decline.
This happens because working for long hours will make the workers tired. Their health is negatively impacted so their productivity will decline.
Final answer:
If a country reduces restrictions on how many hours people can work and this leads to an increase in the total number of hours worked, then productivity falls and output rises.
Explanation:
If a country reduces restrictions on how many hours people can work and this leads to an increase in the total number of hours worked in the economy, then the correct answer is option c) productivity falls and output rises.
When restrictions on working hours are reduced, people may choose to work longer hours. However, this does not necessarily mean that productivity will increase. In fact, when people work longer hours without breaks and proper rest, their productivity can actually decrease. So, while the total output may rise due to more hours being worked, the productivity per hour worked may decline.
For example, if workers are only allowed to work 8 hours a day, but the restrictions are reduced and they are now allowed to work 12 hours a day, they may become tired and less focused during the additional hours, which can lead to a decrease in their productivity.
Which of the following budgets usually shows separate sections for fixed and variable costs?A. Direct materials and manufacturing overhead budget.B. Manufacturing overhead budget and production budget.C. Operating expenses budget and manufacturing overhead budget.D. Production budget and manufacturing overhead budget.
The budgets that show separate sections for fixed and variable costs are the Manufacturing Overhead Budget and the Operating Expenses Budget.
The budget that typically shows separate sections for fixed and variable costs is the Manufacturing Overhead Budget and the Operating Expenses Budget. Fixed costs are expenditures that do not change regardless of the level of production, such as leases, salaries of top management, and costs of machinery. Variable costs, on the other hand, change with the level of production and include costs for raw materials and utilities.
In an Operating Expenses Budget, businesses plan for expenses that do not directly tie to the production of goods, such as marketing costs and administrative salaries. Both fixed and variable components may be included. Similarly, the Manufacturing Overhead Budget includes fixed costs, often referred to as overhead, and can also include variable costs related to the production process.
Therefore, the correct answer to the student's question is C. Operating Expenses Budget and Manufacturing Overhead Budget.
Kelly purchases a house from John. She borrows $75,000 from First City Bank that, along with her $25,000 down payment, equals the $100,000 purchase price of the home. Who has an insurable interest in this home?
Answer:
Kelly and First city bank
Explanation:
The insurable interest means the party has the right to insured his /her property. It involves the financial interest in the property without which the insurable interest can't be involved.
In the given scenario, the Kelly purchase a house from John for $100,000. For which she borrows $75,000 from the city bank and $25,000 down payment. In this two-party have a financial interest in the property i.e Kelly and the first city bank
Madison owns a retail clothing store. Her marketing consultant says that with all the technology at their disposal, customers will go back and forth across multiple channels before choosing to buy an outfit at her store.
The consultant recommends that Madison thinks about her customer's journey before they actually arrive at her store.
Which type of strategy is Madison’s marketing director suggesting to help her drive dales at her physical location?
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The "decision model that computes the difference between the present value of the investment's net cash inflows, using a desired rate of return, and the cost of the initial investment" is best described by which of the following terms?
A) Accounting rate of return
B) Discount rate
C) Net present value
D) Internal rate of return
Answer:
C) Net present value
Explanation:
In this method, the initial investment is subtracted from the discounted present value cash inflows. If the amount comes in positive than the project is beneficial for the company otherwise not.
And, the internal rate of return is that return in which the Net present value come zero.
The average rate of return shows a ratio between the average net profit and the average investment.
In mathematically,
Net present value = Present value of all yearly cash inflows after applying discount factor - initial investment
A segment of Mega Inc. manufactures and sells blankets. The various models of blankets are produced in a single factory using stable technology. They are sold by the sales department, also located in the factory. The segment is most probably accounted for as a(n) _____.
a. cost center.
b. revenue center.
c. profit center.
d. investment center.
e. none of these.
Answer:
c. profit center
Explanation:
Based on the information provided within the question it can be said that the segment is most probably accounted for as a profit center. This is a specialty department formed inside an organization that deals with generating revenues and profits or losses. These departments are completely monitored and controlled since they are the main driving force of the company brand.
Oreva, a multinational corporation, pays $100,000 per year to an information technology firm to archive and secure all of its data into the information technology firm's cloud platform. In this scenario, the cost incurred by Oreva is an example of _____
A) storage cost
B) processing cost
C) acquisition cost
D) retrieval cost
Answer:
A) storage cost
Explanation:
Storage cost -
It is the amount spend on the maintenance of the storage or holding of the inventory .
From the question ,
The multinational company , Oreva , pays $100,00 per year to the It firm , i.e. , the information technology firm , so as to maintain and secure all of its data and storage .
hence , from the question ,
The correct term according to the information of the question is A) storage cost .
Rob is a CPA who works out of an office in his home. His business is named "Friendly Accounting Services." Eventually Rob would like to grow his business to include partners and bookkeepers. We would classify Rob as ________.
Answer:
entrepreneur
Explanation:
Rob can be classified as an entrepreneur.
Reason :The reason behind this is that he takes a shot at his very own and is planning to develop and procure individuals who can work for him. He is likewise ready to have accomplices which implies he is considering extending the business.
These all are the qualities of an entrepreneur i.e. thinking of doing something on their own
Final answer:
Rob is currently a sole proprietor but looking to expand his business to include partners and bookkeepers, indicating that he may transition to a partnership structure in the future.
Explanation:
Rob, a Certified Public Accountant (CPA) running 'Friendly Accounting Services' from his home, is currently classified as a sole proprietor. As a sole proprietor, Rob is the exclusive owner of his business, meaning he receives all the firm's revenues and is personally liable for all of the incurred costs. Since he is the only owner, Rob's business or personal assets may be at risk to cover any debts should the business fail to meet its financial obligations.
However, Rob's aim to grow his business to include partners and bookkeepers indicates that he may be considering transitioning to a partnership. Partnerships allow multiple individuals to own the business jointly, share profits, and contribute to covering losses. This business structure is commonly adopted by firms like legal and accounting practices where trust is a vital component, as partners often invest their own wealth, providing the firm with additional credibility.
In a partnership, raising capital becomes more feasible due to the combined assets of the partners, which helps in business expansion. Each partner in a partnership pays taxes on their share of the income, offering a tax advantage since the business itself isn't taxed.
Crucially, in this shared business structure, all partners are jointly responsible for the firm's liabilities. If Rob is indeed considering this 'growth' path, he would become an 'entrepreneur' with employees, transitioning from solo work to a collaborative business endeavor dedicated to maximizing profit and expanding service reach.
When Desi was determining which option works best to encourage employee participation when planning important changes, he learned that this option seems most effective, which option is it?
a. Command and control
b. Rational persuasion
c. Reward and legitimacy
d. Shared power
e. Force coercion
Answer:
D) Shared power
Explanation:
Power sharing refers to a situation where a team leader will allow the team members to have decision power and influence within the group. It is a system that distributes power among all members of the team in order to encourage greater participation in the decision making processes.
In this case, Desi considers that sharing power with his staff will encourage them to participate more in the planning process. When an employee feels that his participation is valued, he/she will not be afraid or indifferent to do so.
Which one of the following is not a method used by companies to accelerate cash receipts? Offering discounts for early payment Accepting national credit cards for customer purchases Writing off receivables Selling receivables to a factor
Answer:
Writing off receivables
Explanation:.
Receivables represent the amount of money that the company can collect from its debtors. Writing of receivables means that the company is not able to collect its debt, and therefore will consider them as bad debt or uncollectible debt for tax purposes.
Suppose there are two breakfast restaurants in your college town, Waffle Kingdom and Flip’s Flapjacks, and they decide to operate collusively as a cartel. If both restaurants abide by the cartel’s agreement, then each will earn $100,000 in profit. If both restaurants cheat on the cartel’s agreement, then each will earn $25,000 in profit. If one restaurant cheats and the other abides by the agreement, then the cheater will earn a profit of $150,000 while the firm that abides will have a loss of $12,500.1 The most profitable combined outcome for the two restaurants would bea. for both restaurants to abide by the cartel’s agreement.b. for both restaurants to cheat on the cartel’s agreement.c. for Waffle Kingdom to cheat on the agreement and Flip’s Flapjacks to abide by the agreement.d. There is not a profitable outcome for both restaurants
Answer:
a. For both restaurants to abide by the cartel’s agreement.
Explanation:
These type of agreements unite companies that have common interests or are in a similar industry to form an association.
Answer:
B.numbers
Explanation:
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Which type of transaction refers to a flow of MONEY through the economy?A)Individuals spend money to purchase resources from factor markets.B)Money is used to purchase goods and services in the product markets.C)Businesses pay for goods purchased in the product markets with money.D)Money is used to purchase productive resources in the product markets.
Answer:
B) Money is used to purchase goods and services in the product markets.
Answer: B
Explanation:
UsaTestPrep
Robin is working with a little autistic boy, trying to increase the amount of eye contact he can provide. She says, "Look at me." He doesn't, and then she holds his favorite candy near her eye and again says "Look at me." As he turns his gaze toward the candy, he briefly makes eye contact with Robin and she gives him the candy. What sort of treatment is Robin using with her client?
Answer:
Discrete-trial training
Explanation:
Discrete-trial training (DTT) refers to a method used to develop responses to a stimulus. The teacher uses tangible reinforcements to develop one skill at a time, i.e. one desired behavior at a time. DTT is divided into three stages:
the teacher's presentation the child's response the consequenceThe treatment Robin is using with her client is called Applied Behavior Analysis (ABA), a form of behavior therapy that uses reinforcement to encourage desired behaviors.
Explanation:Robin is using a form of behavior therapy known as Applied Behavior Analysis (ABA). This method involves utilizing reinforcement to encourage desired behaviors. In this case, the desired behavior is making eye contact. Robin uses the boy's favorite candy as positive reinforcement (reward) to encourage him to make eye contact with her. When the boy makes eye contact, even briefly, he receives his favorite candy, thereby reinforcing the behavior and making it more likely to be repeated in the future.
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The major shortcoming of a barter economy is A. the requirement of specialization and exchange. B. that goods and services are not traded. C. that money loses value from inflation. D. the requirement of a double coincidence of wants.
Answer:
D) The requirement of a double coincidence of wants.
The major shortcoming of a barter economy is the requirement of a double coincidence of wants. Option (d) is correct.
A barter economy is a cashless economic system where goods and services are exchanged at agreed-upon prices. One of the earliest forms of economy is barter, which predates both monetary systems and written history. Barter may be used effectively in practically any industry.
The three drawbacks of the barter system are as follows: Lack of two desires that coincide. It indicates that in order to buy and sell each other's goods, both sides must agree. ii It is difficult to easily value every item. There are some products that simply cannot be split.
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The project team working on the XK11 could not meet its deadline and was given an extension. When that same team was assigned the XK12, it was given a longer schedule to match those adjustments. However, the project team working on the YK11 completed the project three weeks ahead of schedule. What that team was assigned the YK12, it was given a shorter schedule. The members of the YK12 team are intentionally working slower on this project, and refusing to work any late hours, so that they can get a longer schedule the next time. The control system at this organization suffers from.
Answer:
Rewards for inefficiency
Explanation:
Rewards for inefficiency refers to simply rewarding an employee or group of employees for not doing their work properly. In this case, the team that was working on project XK11 is inefficient and they are simply lazy or bad at what they do, and instead of taking actions to correct this bad behavior, management rewards them by giving them more time = less work.
The problem with this scenario, is that the team that is currently working on project YK12 will eventually realize that they are being punished for being efficient and working properly. They will soon start being inefficient and lazy as the other team in order to be rewarded.
When Zappos, Inc., an online marketer of shoes, accessories, and clothing, contracts out the physical distribution task to third parties such as UPS, this arrangement is called ___________. This is due to the fact that UPS does not have managerial authority within the Zappos marketing channel.
a. warehousing.
b. wholesaling.
c. logistics.
d. illegal.
e. outsourcing.
Answer:
e. outsourcing.
Explanation:
Based on the information provided within the question it seems that what Zappos is doing is called outsourcing. This is the act of when a company hires a third party company to undertake all the responsibilities of a certain task or division of the contracting company. Which in this situation Zappos is outsourcing all of their distribution responsibilities and tasks to UPS who are most likely better equipped to handle this and in a cheaper manner.
"Nanci purchases all of the assets of Michael's Security Service for $200,000. The assets are as follows: Asset Adjusted Basis Fair Market Value Inventory $25,000 $50,000 Equipment 60,000 40,000 Supplies 20,000 20,000 Building 80,000 95,000 Land 10,000 20,000 $195,000 $225,000 What is Nanci's basis in the equipment?"
a. $17,776
b. $35,556
c. $40,000
d. $60,000
e. $61,538
Answer:
option (b) $35,556
Explanation:
Given:
Cost of purchase of assets = $200,000
Asset Adjusted Basis Fair Market Value
Inventory $25,000 $50,000
Equipment $60,000 $40,000
Supplies $20,000 $20,000
Building $80,000 $95,000
Land $10,000 $20,000
Total $195,000 $225,000
Now,
since, fair market value is greater than Basis,
Percentage FMV on Equipment =[tex]\frac{\textup{FMV for equipment}}{\textup{Total FMV}}\times100\%[/tex]
⇒ Percentage FMV on Equipment = [tex]\frac{\$40,000}{\textup{225,000}}\times100\%[/tex]
= 17.77%
thus,
Nanci's basis in the equipment = Percentage FMV × Assets
= 17.77% × $200,000
= $35,555.56 ≈ $35,556
Hence,
The correct answer is option (b) $35,556
Lamey Headstones increases its annual dividend by 1.5 percent annually. The stock sells for $28.40 a share at a required return of 14 percent. What is the amount of the last dividend (the most recent dividend - D0) this company paid?
Answer:
$3.50
Explanation:
Use dividend discount model to solve this question;
[tex]P0 = \frac{D0(1+g)}{r-g}[/tex]
where P0 = Current price
D0 = most recent dividend
g = dividend growth rate
[tex]28.40 = \frac{D0(1.015)}{0.14-0.015} \\ \\ =28.40(0.125) =1.015 D0[/tex]
Divide both sides by 1.015 to solve for D0;
3.55 / 1.015 = D0
D0 = 3.498
Therefore, the last dividend was $3.50
Final answer:
To find the most recent dividend paid by Lamey Headstones, the dividend discount model is used by inserting the given values into the rearranged formula to solve for D0, leading to the calculation of the dividend amount.
Explanation:
The question asks for the calculation of the most recent dividend paid by Lamey Headstones, which has an annual dividend increase of 1.5 percent and sells for $28.40 a share with a required return of 14 percent. To solve this, we use the dividend discount model for a stock with constant growth, given by the formula P = D0(1+g)/(r-g), where P is the current stock price, D0 is the most recent dividend paid, g is the growth rate, and r is the required rate of return. Rearranging the formula to solve for D0, we get D0 = P(r-g)/(1+g).
In this case, P = $28.40, r = 14% or 0.14, and g = 1.5% or 0.015. Substituting these values, we get D0 = $28.40(0.14 - 0.015) / (1 + 0.015). Calculating this gives us the value of D0, which is the amount of the last dividend paid by the company.
Sean, the manager at Shield Corp., intends to examine his company's financial position at the moment. In this case, which of the following financial statements is Sean most likely to use?
a.The dividend report
b.The statement of cash flows
c.The balance sheet
d.The income statement
e.The statement of retained earnings
Answer: C
Explanation:
The most appropriate statement to assess the financial position of firms is the Balance Sheet because it shows a list of the firm's assets, liabilities and finance. Hence, the balance sheet is the skeleton of a company.
Abstracting from inflation, leverage enables investors to specialize in stocks or debt instruments according to their level of information about a firm’s prospects and/or their degree of risk aversion. In particular, stocks will tend to be held by investors who are
Answer:
The correct answer is more informed and more risk-averse.
Explanation:
Financial leverage is simply using debt to finance an operation. As simple as that. That is, instead of conducting an operation with own funds, it will be done with own funds and a credit. The main advantage is that you can multiply profitability and the main drawback is that the operation does not go well and ends up being insolvent.