The DFA also believes to purse high net worth individuals that would increase its total management assets so as to generate more profits through registered investment advisors (RIAs), showing significant assets growth over time in Exhibit 2. Besides, the Exhibit 5 shows that DFA’s fees are lower than those of most actively managed funds but higher than those of pure index funds. Therefore, DFA operating passive funds would provide its competitive position in the market and improve investor’s wealth in the current and future time. * Justify whether DFA people believes in efficient market According to efficient market hypothesis, the stock price should reflect all relevant information, which means the stock should be fairly priced regardless of any feasible analysis. However, in fact, the DFA people do not believe market is efficient because their core principles indicate profit depends on value of academic research and ability of skilled trader.
A firm’s value depends on the positive net income generated in the past. True False A firm’s value depends on the firm’s ability to generate positive cash flows now and in the future True False When determining the value of a firm, which of the following statements is true? • Inversters are risk neutral. Other things equal they prefer to pay more stocks that are less risky and have uncertain cash flows • Investers love risk. Other things equal they prefer to pay more for stocks that are more risky and have uncertain cash flows.
(Why do you think? Make a convincing argument as a DFA representative.) 5) Try to explain the DFA small and value stock strategies in both rational and irrational/behavioral terms. What do the efficient market enthusiasts say about the performance of small stocks over large ones, and the performance of high book-to-market equity (BE/ME) or “value” stocks over low BE/ME or
Additionally, the company has a strong reputation in product development. Conclusion of the supplier information Considering the products PSC needs should be high quality and the supplier's production and lead-time should be high flexible to support PSC's make-to-order strategy. Avoiding possible risks are the critical issue. Multiple sourcing might minimize the purchasing risk, assurance of the source of supply and also enhanced buyer's negotiation leverage to get a better cost. According to our analysis of these case, Sure Tech and E-Drive are in better overall position.
It is crucial that Wal-Mart keeps the firms operating activities cash flows largely positive. With the negative cash flows from investing activities and financing activities, negative operating cash flows would be very detrimental to the firm and could mean the firms collapse. The positive cash flow the firm makes in operating activities is allocated and used in other areas, such as financing activities or investing activities. The positive cash flows from operating activities is mainly derived from income from continuing operations. Looking at Wal-Mart income statement, you see a line item called “Income from continuing operations”; this line is two lines up from “Consolidated net income”.
Being able to track sales compared to the previous years’ numbers is a valuable tool in being able to track business. They use this information to forecast on where they think the business will be heading in the next week, month, or year. If the debt percent gets to high then they need to adjust the amount of liabilities that they have to bring that number down. Knowing the times interest earned ratio allows the managers to know at what percent the company is earning interest on its net income. Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders..
Their objectives are often huge which requires a lump-sum to be invested. The older people choose this security also because it gives fixed income which is guaranteed, there is minimal risk and less management needed. 8) What is laddering GICs? Pros and cons? Ans): Laddering GIC(s) is a proven method of investing (also known as a laddering strategy) it can help you reduce the risk of interest rate fluctuations and increase your portfolio's overall return.
: A. making short-run decisions to increase profits that are not in the company's best long-run interests B. creating budgetary slack C. decreasing profits when actual profits are significantly exceeding the profit target D. all of these answers are correct Question 7 An example of a favorable variance is _____. A. actual revenues are less than expected B. actual expenses are less than expected C. material prices are greater than expected D. expected labor costs are less than actual costs Question 8 Differences between the static budget and the flexible budget are due to _____. A. problems of cost control B. poor usage of material and labor C. a combination of price and material variances D. actual activity differing from expected activity levels Question 9 The type of budget that serves as the original benchmark for evaluating performance is called a _____ budget. A. balanced B. cost C. flexible D. static Question 10 Activity-level variances plus flexible-budget variances
Companies will know where they can maximize these profits. Also consumers spending can be predicted off what provides the greatest utility or satisfaction. Because of the laws of supply and demand, it is better understood when to produce or offer goods and services and when it is better to produce
Under this strategy, DFA decided to pursue high-net –worth individuals, in addition to institutions, clients though registered investment advisors (RIAs). The DFA’s business strategy is good which is because the high profits and well growth. There are not all of DFA people believe in the principle of efficient market. This is because the weak-form of the efficient market hypothesis asserts that stock prices already reflect all information contained in the history of past prices. Additionally,