little toy company makes and sells miniature doll houses. little produces two kinds of houses: standard and deluxe. the demand for doll houses is highest in november and december. expecting this trend to continue, little is interested in how to best utilize available capacity. given the following information, how many standard and deluxe doll houses should little produce? standard deluxe demand 8,000 3,000 unit price $60 $80 unit variable cost $25 $35 unit contribution margin $35 $45 production hours per unit 0.5 1 available production hours 5,000 hrs total fixed costs $40,000 a. 5,000 standard; 3,000 deluxe. b. 3,636 standard; 7,364 deluxe. c. 8,000 standard; 1,000 deluxe. d. 3,636 standard; 1,363 deluxe.

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Answer 1

The answer is   c. 8,000 standard; 1,000 deluxe

Since we have production hours as a limiting factor, therefore we should manufacture that product which gives maximum contribution per hour.

Calculation of contribution per hour

Particulars                     standard                deluxe

    Sale price                           60                            80

(-) variable cost                   (25)                    (35)

Contribution per unit             35                      45

Units per hour                       2                         1

Contribution per hour               70                      45

Ranking                                        I                        II

   

Since the contribution per hour of the standard is more therefore first we should employ resources to manufacture the standard and then remaining to manufacture deluxe.

Calculation of units to be manufactured

Product type              Hour per unit           Total hours                Units

Standard                      0.5         4000  (8000x0.5)                  8000

Delux                               1                   1000                                    1000

Total                         5000 hours

Therefore we should manufacture 8000 units of standard and 1000 units of deluxe.

c. 8,000 standards; 1,000 deluxe

Examples of manufacturing include automotive agencies, bakeries, shoemakers, and tailors, as all of them create products, in preference to supplying services. But, for instance, logging or mining are not productions, as they no longer trade items into new merchandise.

System production is a production approach that creates goods by means of combining components, elements, or raw substances using a formula or recipe. It is often used in industries that produce bulk portions of products, together with meals, liquids, delicate oil, gasoline, prescription drugs, chemicals, and plastics.

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Related Questions

owners of a limited liability company: group of answer choices have unlimited liability for contracts entered into by the llc. can transfer their membership as a personal property interest. cannot assume any management responsibilities. all of the above

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In a limited liability company or partnership, business partners are only liable for the amount of money they have put into the company.

What is a banking system?A bank is a type of financial institution authorized to grant loans and accept deposits for checking and savings accounts. Individual retirement accounts (IRAs), certificates of deposit (CDs), currency exchange, and safe deposit boxes are other services that banks offer.Retail banks, commercial or corporate banks, and investment banks are just a few of the several sorts of banks.Since the fourteenth century, at least, banks have existed. They give customers and business owners a secure place to store their cash as well as a way to get loans for both personal and professional endeavors.Banks provide loans and charge interest on them using the money that is deposited.Since the Medici family began dabbling in banking during the Renaissance, the basic business model hasn't changed much, but the variety of products that banks offer has expanded.

Hence, In a limited liability company or partnership, business partners are only liable for the amount of money they have put into the company

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classify each of the foods goods according to whether it is rivalrous, nonrivalrous, excludable, or nonexcludable. rivalrous is also referred to as rival in consumption. a. a sports team t-shirt nonrivalrous and nonexcludable nonrivalrous and excludable rivalrous and excludable rivalrous and nonexcludable b. the air we breathe rivalrous and excludable nonrivalrous and excludable nonrivalrous and nonexcludable rivalrous and nonexcludable c. atlantic bluefin tuna in the mediterranean sea nonrivalrous and excludable rivalrous and nonexcludable rivalrous and excludable nonrivalrous and nonexcludable d. a toll road in normal traffic rivalrous and excludable nonrivalrous and nonexcludable nonrivalrous and excludable rivalrous and nonexcludable

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Rivalrous is also referred to as rival in consumption Atlantic bluefin tuna in the mediterranean sea nonrivalrous and excludable rivalrous and nonexcludable rivalrous and excludable nonrivalrous and nonexcludable.

The Atlantic Ocean is the second-largest of the world's five oceans, with a region of concerning 106,460,000 km2 (41,100,000 sq mi). It covers more or less 20% of Earth's surface and about 29% of its water surface area. it's best known to separate the "Old World" of Africa, Europe, and Asia from the "New World" of the Americas in the EU perception of the World.

The ocean occupies an elongated, formed basin extending lengthways between Europe and Africa to the east, and North and South America to the west. united part of the interconnected World Ocean, it is connected within the north to the Arctic Ocean, to the Pacific Ocean in the southwest.

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nathan was worried that his company was missing a lot of opportunity to sell their products in china because of the separation created by language, culture, and distance. in other words, his company had a lack of blank . multiple choice question. metrics knowledge manufacturing financial expertise

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Export assistance services for U.S. non-agricultural businesses are led by the Department of Commerce's International Trade Administration (ITA).

In most exporting situations, what kind of business is typically utilized as a reliable intermediary?

Distributors.are intermediaries for exports who represent the business on the international market.Distributors frequently act as the "face" of numerous businesses in a country, selling products, assisting customers, and receiving payments.

Which three kinds of countertrade are there?

Counter trade is classified as:barter, offset, switch trading, counter-purchase, and compensation or buyback.

A buyback is a counter trade when a company agrees to take a certain percentage of the plant's output as partial payment for a contract to build a manufacturing facility or provide technology, equipment, training, or other services to a country.

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show how we can use our monopolistic model to analyze aggregate trade between countries using a type of gravity. describe what you think the most interesting findings are when applying gravity to us-canada trade?

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Show how we can use our monopolistic model.Using this method, we observed that trade between the United States and Canada decreased by approximately 44%.

Due to border closures, the prices of US goods destined for Canada have skyrocketed. This would greatly mitigate the negative impact on US-Canada trade.

What are Monopolistic  features?

A monopoly market is a market structure that has the characteristics of a pure monopoly. A monopoly occurs when a supplier offers a particular good or service to a large number of consumers. A monopoly market allows a monopoly (or dominant firm) to control the market and set prices and supply.

Why is monopoly important?

Monopolies can lead to large economies of scale. A company that has a monopoly on a particular type of product may be able to mass produce that product at a lower unit price. Depending on corporate ethics, these low prices may be passed on to consumers.

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Although channels of distribution allow consumers and industrial users access to products from all over the world, they do not guarantee that consumers will be able to purchase anything they want. Tiny time they want. Certain products may only be available in limited supplies. Because of supply and demand, channel members may be able to charge higher prices for coveted products. This may be fine for a designer handbag, but what if the product is more basic, like fresh water or medical supplies? Or, let's say there is a hurricane or tornado in a certain part of the country, and many people need to repair their homes and roofs. Is it OK for channel members to mark up hardware products during this time to make a bigger profit?

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Answer:

We can more easily obtain products from all over the world. Channels of distribution allow consumers, industrial users, producers, and other channel intermediaries to save time and money. They also allow us to more easily obtain products from all over the world, since we do not have to travel and search for each individual item we wish to purchase.

the marketing metric for subscriber loss is called ______, which is the percentage of cancelled accounts in a period—usually monthly.

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The marketing metric for subscriber loss is called Customer churn rate, which is the percentage of canceled accounts in a period—usually monthly.

Churn rate occasionally referred to as attrition price, is the rate at which customers prevent doing business with an organization over a given time period.

Churn can also observe to the number of subscribers who cancel or don't renew a subscription.

The higher your churn rate, the more clients prevent buying from your commercial enterprise.

The churn charge components is: (lost customers ÷ total clients on the start of time period) x 100. for example, in case your business had 250 customers at the start of the month and lost 10 customers by using the cease, you would divide 10 by using 250. the solution is 0.04.

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what is not a principle for privacy created by the organization for economic cooperation and development (oecd)?

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Consider that all information ought to be free is not a principle created for privacy created by OECD.

Users should respect intellectual property rights and not take information for granted. One of the prevalent ethical fallacies is the notion that information ought to be accessible to all.

An globally recognized collection of guidelines for handling personal data is the OECD's Guidelines on the Protection of Privacy and Transborder Flows of Personal Data.

They can be a great starting point for any analytics project trying to lower data-privacy concerns because they are reflected in existing and developing data-protection legislation. It is also a sensible direction for the governance of the personal data that organizations acquire and manage throughout the course of their operations.

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the centers expect the following changes in the next year: (i) increase sales 20%; (ii) decrease costs $390,000; (iii) decrease average operating assets $496,000. compute the expected return on investment (roi) for each center. assume center i has a controllable margin percentage of 70%

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The predicted return is the amount of income or loss an investor can count on receiving on an investment.

An expected return is calculated with the aid of multiplying practicable outcomes by using the odds of them happening and then totaling these results. Expected returns cannot be guaranteed.

What Is a Good ROI?

According to conventional wisdom, an annual ROI of approximately 7% or higher is considered a proper ROI for an investment in stocks. This is also about the common annual return of the S&P 500, accounting for inflation.

How do you calculate expected return on investment?

Expected return = (Return A x chance A) + (Return B x probability B) Expected return is just one of many attainable returns when you consider that the funding market is highly volatile. You can calculate anticipated return as a weighted average consequence due to the fact it accounts for the investment's historical performance.

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Mangelo restaurant had liabilities with a carrying value of $425,000 and fair value of $600,000. How should mangelo report these liabilities on the balance sheet?.

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Liabilities should be reported by Mangelo at carrying value and the fair value of the liabilities should be included in a remark to the financial statements.

What are financial statements?

Financial statements are official records of the financial activities and position of a company, an individual, or another entity (also known as financial reports). Financial statements serve as a resource for a variety of users who need to make financial decisions by providing information on an organization's financial situation, performance, and changes in financial position. An organization's financial status is directly impacted by the stated assets, liabilities, equity, revenue, and expenses. Though rules differ from country to country, an audit of a public company's financial statements is often required for investment, financing, and tax reasons. These responsibilities are typically performed by independent accounting firms or auditing firms.

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The video clip from tommy boy where they were talking about the guarantee on the box demonstrated overcoming objections. At what point in the sales process does this usually happen?.

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When they were talking about the guarantee on the box demonstrated overcoming objections, the sales occur in part when they explain about what things are guaranteed. They promote the store's service to buyers, which is also part of the sale.

Marketing can be described to create awareness of your organization and brand to potential customers. Sales means turn viewership into a profit, by changing those potential customers into actual ones. The crucial of marketing for your business is that it create the customers aware of your products or services, engages them, and helps them make the buying decision.

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________ is a nonpersonal, indirectly paid presentation of an organization, good, or service.
-Publicity
-Sales promotion
-Direct marketing
-Advertising

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A presentation of an organization, good, or service that is not personal and is funded indirectly is known as publicity.A news story or editorial about the company or its goods or services are examples of publicity.

What is the essential benefit of exposure?

Your business gains credibility through public relations because the content is more authentic and informative.According to studies, PR gives the consumer market more visibility and credibility than advertising, which is thought to be more promotional.

What is publicity, exactly?

Publicity is the public's awareness or visibility of a product, service, person, or organization in marketing.It could also refer to the dissemination of information to the general public, frequently (but not always) through the media.

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advocates say that fixed exchange rates can help a country deal with economic crises.
a. true
b. false

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Advocates say that fixed exchange rates can help a country deal with economic crises.

This statement is False.

A financial crisis is one of many situations in which some financial assets suddenly lose a large portion of their face value. In the 19th and early 20th centuries, many financial crises were associated with bank panics, and many recessions coincided with those panics.

An economic crisis describes a situation in which a country's economy is in a sharp decline, usually caused by a financial crisis. Economic crises can take the form of stagflation, recessions, or recessions.

An economic crisis in which the economy exhibits a slowdown in economic activity due to a financial/banking crisis, inflation, currency crisis, or government debt.

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claire corporation is planning to issue bonds with a face value of $140,000 and a coupon rate of 8 percent. the bonds mature in two years and pay interest quarterly every march 31, june 30, september 30, and december 31. all of the bonds were sold on january 1 of this year. claire uses the effective-interest amortization method and does not use a discount account. assume an annual market rate of interest of 12 percent. (fv of $1, pv of $1, fva of $1, and pva of $1)

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The contract, also known as a financial instrument, that an organization issues in the market to raise funds for its debt is referred to as a bond.The terms and conditions pertaining to bonds are outlined in this contract.

1st Year: March 31, 2000, 0.970873 1,941.75 June 30, 2000, 0.942595 1,885.19 September 30, 2000, 0.915141 1,830.2

Whats is a bond?

Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.

How do bonds function?

When you buy I bonds, they start earning interest on the first day of each month.The bond's principal value is increased twice a year by adding all six months' worth of interest.This gives the bond a new value—the old value plus the interest that was earned.

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russell sold his small variety store to a large retail chain but has agreed to stay on and manage the store. russell should expect a. cultural conflict. b. freedom from responsibility. c. a feeling of elation with his new wealth. d. greater independence.

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An initial public offering (IPO) is the procedure of releasing fresh shares of stock to the public for the first time in a private firm.

What Is an Initial Public Offering (IPO)? A corporation can raise equity funding from the general public through an IPO.An initial public offering (IPO) is the process of selling new shares of a private company to the general public.To hold an IPO, businesses must satisfy Securities and Exchange Commission (SEC) and exchange standards.IPOs give businesses the chance to raise money by selling shares on the primary market.Investment banks are hired by businesses to sell products, assess customer demand, determine IPO pricing, and other tasks.The company's founders and early investors can use an IPO as an exit option to realize the full return on their private investment.

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people with higher wages: a. tend to view pay as more fair than those with lower compensation b. tend to view pay as less fair than those with higher compensation c. are working under a uniform transactional compensation system d. are likely working under a uniform relational compensation system

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People with higher wages: a. tend to view pay as more fair than those with lower compensation.

You will be paid your annual salary for the duration of your employment or until the terms are altered, whichever comes first. The main difference between a salary and an hourly rate is that a salary is a set amount of money that is agreed upon by both the company and the employee. The performance of an employee and the number of hours worked, however, can affect pay. The system you use to determine how much each employee in your company is paid is called a compensation structure, often known as a "pay structure" or "salary structure." Details like merit, the length of employment, and industry minimums and maximums are taken into consideration.

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Percy is attracted by the advantages of enterprise software but his small business cannot afford to make a major up-front investment in new applications at this time. Percy _____.

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Percy You might consider paying as you go enterprise software that is hosted.

What kind of system makes use of a public database with essential operational and planning data?

Over the past few decades, enterprise resource planning (ERP) systems have grown to be a crucial tool for enterprises. An ERP solution automates crucial business procedures and acts as a central repository for all operational and financial data from across the organization.

Which of the following approaches to task separation in an ERP system is the most effective?

Which of the following approaches to task separation in an ERP system is the most effective? There shouldn't be a single individual in charge of authorizing, documenting, or maintaining custody of organizational assets.

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What is the most important question you should have after seeing this ad about a check cashing business?.

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You should be most concerned when you encounter an advertisement for a check cashing service.

Why Do You Want to Cash Your Check at ACE?Credit checks are not required?Is it possible for me to obtain a written copy of every fee you impose for your services?

Check cashing services: what are they?

People lacking bank accounts are able to cash checks thanks to check-cashing services. People who want cash are charged a fee, sometimes as little as $1 and other times as much as $100. The service can be utilized by anyone who needs cash immediately away, but it is especially intended for the unbanked or underbanked.

What steps are involved in cashing a check?Step One: Head to the bank or your preferred check-cashing business with the check and your photo ID. Step two is to sign the cheque and give it to the cashier. Step three is when the teller processes your cheque and gives you the money. Personal checks are those drawn from a person's own checkbook.

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how is ethical decision making within a business setting consistent with the christian worldview cwv

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The christian worldview for the ethical decision within a business setting consistent are the standards set by the God.

What is ethical decision and how the business setting consistent with the christian worldview?Ethical decision making is the decision made on the ethics by the group or committee of culturous system.Here the question is asked of the ethical decision making within a business setting consistent with the christian worldview.The christian worldview believes that humanity is the prior culture and every human have the abilities of understanding right from wrong.Ethics is all about doing good and right , and avoid the wrong and ethics work is about doing right in the workplace.Hence the christian worldview for the ethical decision within a business setting consistent are the standards set by the God.Christians believe it strongly that ethics is morality and objective and every human scheduled by God.

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evaluating the quality of services before making a purchase is harder than evaluating the quality of goods because, compared to goods, services tend to exhibit fewer ____________ qualities

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Evaluating the quality of services before making a purchase is harder than evaluating the quality of goods because, compared to goods, services tend to exhibit fewer search qualities.

In economics, a provider is an intangible commodity. extra, in particular, services are an intangible equivalent of economic items. carrier provision is frequently an economic activity where the consumer does now not usually, besides via distinct settlement, achieve specific possession of the thing purchased.

A service is an "(intangible) act or use for which a client, company, or authorities is willing to pay." Examples include paintings done with the aid of barbers, doctors, legal professionals, mechanics, banks, insurance companies, and so forth. Public offerings are those that society (nation, fiscal union, or location) as a whole can pay for.

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the existence of cognitive biases eliminates the need for a proper application of professional skepticism on audits.
A. true
B. false

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The existence of cognitive biases eliminates the need for a proper application of professional skepticism on audits. This statement is False.

Skepticism, also spelled skepticism, is an attitude that questions or doubts claims of knowledge that are perceived as mere beliefs or dogmas.

For example, if a person is skeptical of government claims about an ongoing war, they doubt that those claims are accurate. Skepticism and skepticism are both English terms. In the United States, “skepticism” is preferred to “skepticism” (93 vs. 7). In the UK, a ratio of 57 to 43 is for 'skepticism' rather than 'skepticism'. In India, “skepticism” is preferred to “skepticism” (57 to 43).

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income elasticity of demand equals: please choose the correct answer from the following choices, and then select the submit answer button. answer choices

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The term "income elasticity of demand" describes how responsive a given good's quantity demand is to changes in the real income of the consumers who purchase it.

What is income elasticity?The percent change in quantity demanded divided by the percent change in income is the formula for calculating the income elasticity of demand. With the aid of income elasticity of demand, you can determine whether a given good is a luxury or a necessity.The more closely consumer income fluctuations affect demand for a given good, the higher its income elasticity of demand is. Businesses frequently assess the demand for their products' income elasticity to aid in forecasting how a business cycle will affect product sales.Goods can be broadly categorized as inferior and normal goods depending on the values of the income elasticity of demand. Demand for typical goods is positively correlated with income, meaning that as incomes rise, so does the demand for those goods at each price point.

Hence,The term "income elasticity of demand" describes how responsive a given good's quantity demand is to changes in the real income of the consumers who purchase it.

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out of the five factors of production categories, which category does an employee instruction manual fall into?

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Five factors of production category are land, labor, capital, entrepreneurship and knowledge.

Land: Land is that the natural resource on which we build our buildings and cities. Is the first factor of production category

Labor: Labor is any act that creates value. This includes skilled professions like doctors and lawyers.

Capital: Capital is that the money or other assets that are invested in a business to help it grow or maintain itself.

Entrepreneurship: Entrepreneurship may be a factor of production.

Knowledge: Knowledge may be a form of information that is used in the production process. Knowledge also can be used to create new products or processes that will lead to increased profits.

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Order the market structures according to the level of prices you would expect. Then, order them according to the level of quantity you would expect.
a. Cartel
b. Entry deterrence
c. Duopoly without collusion
d. Monopolistic competition
1. Highest price
2. Highest quantity
a. Cartel
b. Entry deterrence
c. Monopolistic competition
d. Duopoly without collusion
1. Lowest price
2. Lowest quantity

Answers

Order the market structures according to the level of prices you would expect.

Highest price 1)  cartel, 2) duopoply without collusion , 3)Entry deterrence, 4) Monopolistic Competition

Highest Quantity , 1) Monopolistic Competition , 2) entry deterrence , 3) duopoply without collusion, 4) cartel

A market is a composition of structures, institutions, approaches, social members of the family or infrastructures wherein parties engage in trade. while events may also trade items and offerings by barter, maximum markets rely upon sellers offering their goods or services to shoppers in alternate for cash.

A marketplace is defined because the sum overall of all the consumers and sellers inside the place or vicinity below attention. The vicinity can be the earth, or countries, regions, states, or cities. The cost, price and charge of items traded are as consistent with forces of deliver and call for in a market.

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the convenience yield associated with holding the underlying asset of a derivative is most accurately described as:

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An advantage of retaining an underlying asset rather than the corresponding derivative instrument or contract is known as a convenience yield. the advantages of owning the item that are not monetary.

The term "convenience yield" used to describe holding the underlying asset of a derivative typically alludes to non-financial advantages of holding an asset, such as being able to sell an overpriced asset that is challenging to sell short. The term "convenience yield" excludes financial benefits like interest and dividend payments. The cost of carrying an asset less any financial and non-financial benefits is known as the net cost of carry. The convenience yield refers to the advantages of retaining the physical asset.

Benefits of Convenience yield are as follows –

1) Inflows may include intangibles as well

2) Intangible inflows are worth that market players sense simply from owning an asset.

The formulae below depict the Convenience yield -

Futures price = Spot price (1+Rf) + Storage Costs – Convenience Yield

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Question 9 of 10
What is one strategy that can help a borrower reduce the cost of a loan?
A. The borrower can choose a loan with a simple rather than a
compound interest rate.
B. The borrower can choose a credit card with a low minimum
monthly payment.
C. The borrower can choose a credit card with a high minimum
monthly payment.
D. The borrower can choose a loan with a compound rather than a
simple interest rate.

Answers

The borrower can apply the strategy of choosing a loan with a compound interest rate rather than a simple interest rate to reduce the cost of the loan. The correct option here is d.

What is compound interest?

Compound interest is the interest which we earn on our own. With a savings account that earns compound interest, we earn interest on the initial principal plus the interest that accumulates over time.

When we add money to a savings account or a similar account we receive interest based on the amount that we have deposited. Therefore the effect which we will have on our savings can be dramatic.

With the initial years of savings, we may feel like we are earning only a modest amount of interest but with each passing year, our compounding interest grows exponentially. Until it exceeds our principal amount and is responsible for most of the growth in our account.

So compound interest can turn a small investment into a huge wealth over time.

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according to the full range of leadership model, which transformational factor refers to the emotional component of leadership? a.individualized consideration b.inspirational motivation c.idealized influence d.intellectual stimulation

Answers

The transformational factor refers to the emotional component of leadership is  Idealized influence

Option C is correct .

What is a Transformational Leadership Model?

Transformational leadership is defined as a leadership approach that brings about change in individuals and social systems. Ideally, you bring valuable positive change to your followers with the ultimate goal of turning them into leaders.

Why is Transformational Leadership Used?

Transformational leaders inspire and motivate employees without micromanaging. They trust trained employees to exercise decision-making power in their assigned tasks. It's a leadership style designed to give employees more space to be creative, look to the future, and find new solutions to old problems.

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Standardization of a psychological test is important because the process ________.

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Standarisation of a Psychological test is crucial for the procedure. sets test-taking scores that may be compared to those of upcoming test-takers.

Why Standardization of a psychological test is important?

This helps psychologists rule out test-specific explanations for any observed differences in memory performance.

The process of applying and expanding technical standards, also known as standardization or standardisation, is based mostly on the agreement of several parties, such as enterprises, users, nonprofit organizations, standards organizations, and governments.

In order to standardize a certain industry, it is necessary to develop, market, and maybe mandate requirements-based and compatible technology and methods. Technology standards may impose the quality and uniformity of a technology and ensure its protection, compatibility, and interoperability.

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As described in the ten axioms for success, what approach should be used to addresses a common source of project failure described as scope creep or drift caused by deviations from the project plan?.

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The ten axioms for success, the approach should be used to addresses a common source of project failure are plan, execute and action.

To avoid project failure, make perfect plan and strategy before execution the project.

The workplan provides the step-by-step instructions for constructing project deliverables and managing the project. You should use a prior workplan from a similar project as a model.

The scope creep is typically caused by key project stakeholder changing requirements or by internal miscommunication and disagreements in project deals.

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multiple choice question purchasing power parity (ppp) multiple choice question. is a reason why all economies have left the gold standard. is as commonly accepted as the law of demand. represents the universality of exchange rate systems. almost never holds completely.

Answers

Purchasing power parity (PPP) represents the universality of exchange rate systems.

Purchasing power parity is a measure of prices in different countries that uses the price of a particular commodity to compare the absolute purchasing power of each country's currency with the standard of living of a given population.

A simple example is a liter of Coca-Cola. At €2.3 in France and $2.00 in the US, Coca-Cola's PPP between France and the US is 2.3/2.00 or 1.15.

Purchasing Power Parity (PPP) is a popular indicator used by macroeconomic analysts to compare currencies of different countries through a "shopping basket" approach. Purchasing power parity (PPP) allows economists to compare the economic productivity and living standards of countries.

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diversification reduces the risk of a portfolio because the prices of different securities do not move exactly together. a.true b.false

Answers

False. Diversification cannot reduce the risk of a portfolio because the prices of different securities do not move exactly together.

A diversified portfolio is a collection of various investments that work together to lower the overall risk profile of the investor. Owning stocks from a variety of various sectors, nations, and risk profiles as well as other investments like bonds, commodities, and real estate are examples of diversification.

Although it can help you control risk by distributing your investment funds among several asset classes and types of securities, diversification cannot completely remove risk or ensure a profit. The chance of losing money still exists.

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