Define underinvestment problem

Q: Define asset-backed security

A: Answer: Asset backed security is nothing but a security is made up of other financial securities.…

Q: Explain the Service Projects versus Revenue Projects?

A: The project is the collaborative effort initiated to achieve a certain objective within a certain…

Q: Differentiate between “loss carryback” and “loss carryforward.”Which can be accounted for with the…

A:

Q: Distinguish between inherent risk and control risk

A: Inherent risk: Inherent risk measures the auditor’s assessment of the susceptibility in a material…

Q: Distinguish between losses from transaction exposure, operating exposure, and translation exposure?…

A: The Answer :

Q: What is preemptive rights offering?

A: Preemptive rights:  A contractual clause that provides the shareholders with a right to purchase the…

Q: Define the term Unrealized gain.

A: Investment: The act of allocating money to buy a monetary asset in order to generate wealth in the…

Q: Define Intrinsic value.

A:

Q: Explain what is risk decompositon

A: Risk is referred as the future uncertainty with reference to the deviation from an expected earnings…

Q: Explain risk of overreliance and risk of underreliance in brief.

A: Due to material misstatement, an auditor probably render  an unqualified opinion on the state of…

Q: Define within-firm risk

A: Within-firm risk: Corporate (within-firm) risk is a hazard identified with an individual business.…

Q: inherent risk

A: Inherent risk is the risk of errors or frauds that may occur irrespective of the operation of…

Q: Define relevant risk

A: For investors, risks are classified into the following two types: Systematic risk/relevant…

Q: Define diversifiable risk

A: Diversifiable risk It is special to a given business or industry. Regularly known in the feeling of…

Q: Explain Derivative security?

A: Derivatives security: A derivative security is considered as a financial instrument whose value is…

Q: Explain risk-neutral valuation

A: A risk-neutral valuation is a probability measure used to help pricing derivatives and other…

Q: Define Loss contingency.

A: A loss contingency gives the reader of the financial statements early warning of an impending…

Q: Define the term Fair Value Hierarchy.

A: Fair value: A value which is determined based on the market situation, business demand, and the…

Q: What is an Anti-dilutive Security

A: Anti-dilutive securities are those securities that a company has issued and which can get converted…

Q: What are the examples of gain contingency?

A: A gain contingency is a uncertain future event which results in economic inflow to a entity, it is…

Q: Define fair value hedges.

A:

Q: why to conduct feasivility study

A: Forecasting by financial analysts assists management in determining appropriate ways to attain the…

Q: / Risk and Return

A: There are 3 things given in the question and asked for an explanation of only 1. Risk and Return…

Q: How do the passive losses rules and the at risk rules work in conjunction to limit losses?

A: Passive losses: These are the losses that take place when expenses exceed the income in the passive…

Q: Explain the limitations of CAPM.

A: A mathematical model that describes the link between a security's expected return and risk is…

Q: Define unsyndicated offering

A: SOLUTION:-   A syndicate offering is a method of bringing a brand new security to the market. The…

Q: Define asymmetric hedge

A: A strategy that helps to reduce the loss which occurs from the movement of the asset's price is term…

Q: How do fixed asset systems differ from purchases systems?

A: Definition: Purchase system: The identification and procurement of the inventory needs for the…

Q: IT Governance Risk issues

A: IT Governance: It is a framework that assists the organizations in ensuring that the business…

Q: What is meant by the term management by exception?

A: Business Management:   Business management refers to the skills associated with running a company…

Q: Why do deferred liabilities arise? Explain your answer with suitable example.

A: Why do deferred liabilities arise? Explain your answer with suitable example.

Q: State difference between sureties and security?

A: In development contracts, if a worker for hire neglects to play out the works, the business would…

Q: (a) Define risk-free asset

A: An asset which generally having certain future returns and there is no chance of loss in return is…

Q: Define GAP Analysis

A: Gap Analysis is done by the company to fill the gaps and improve the performance of the company.…

Q: Define devaluation

A: Currency- Currency is defined as money in terms of paper or coins which is issued by the government.…

Q: Explain the Nonrecourse clause?

A: A sum of money that an individual or company owes is called liability. It is an obligation between…

Q: Define the term spoilage.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Illustrate The Underwriting Process?

A: Underwriting is a process by which investment banks generate funds for the organization.

Q: Define underwriting syndicate

A: An underwriting syndicate is headed by a bank known as the lead underwriter. It is a group of banks…

Q: Distinguish between exposure and risk.

A:

Q: Explain direct-effect noncompliance.

A: Direct-effect noncompliance: Direct-effect noncompliance produces direct and material effects on…

Q: Define Securitization.

A: