The expected return for a portfolio without borrowing
A) should never be less than the expected return of the asset with lowest expected return.
B) should never be greater than the expected return of the asset with highest expected return.
C) may not be an event with even a positive probability of occurrence.
D) All of the above.
Answer: D) All of the above.
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Financial statements are prepared after an entity's transactions are analyzed and recorded. Which of the following reports is one of the required financial statements?
A) Statement of cash flows B) Statement of return on assets C) Statement of dividends D) Expense statement
The Missouri River Pendant Company uses commercial paper to satisfy part of its short-term
financing requirements. Next week, it intends to sell $18 million in 90-day maturity paper on which it expects to have to pay discounted interest at an annual rate of 7 percent per annum. In addition, Stoney River expects to incur a cost of approximately $25,000 in dealer placement fees and other expenses of issuing the paper. What is the effective annual cost of credit to Missouri River? A) 7.3% B) 7.1% C) 7.5% D) 7.7%