Kumar Consulting Operates Several Stock Investment Portfolios That Are Used

question 10

Multiple Choice

Kumar Consulting operates several stock investment portfolios that are used by firms for investment of pension plan assets.Last year, one portfolio had a realized return of 12.6 percent and a beta coefficient of 1.15.The average T-bond rate was 7 percent and the realized rate of return on the S&P 500 was 12 percent.What was the portfolio's alpha?

• A) −0.75%
• B) −0.15%
• C) 0%
• D) 0.15%
• E) 0.75%

Understand the concept and purpose of adjusting entries in the accounting process.

Identify the types of accounts affected by adjusting entries and their impact on financial statements.

Distinguish between prepaid expenses and their adjustment entries.

Recognize accrued expenses and revenues and how they are reported.

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Definitions:

Legal Taxable Entity

An organization or individual that is recognized by law as a separate legal entity for tax purposes.

Shares Of Stock

Representations of ownership in a corporation, each of which entitles the shareholder to a fraction of the company's assets and profits, depending on the amount of shares owned.

Corporation

A legal entity separate from its shareholders, with its own rights, privileges, and liabilities.

Business Entity

An organization established as a separate legal entity for business purposes, which may include corporations, partnerships, and sole proprietorships.