Statement of Financial Accounting Concepts No. 1 states that one of the objectives of financial reporting is to help “current and potential investors and creditors (and other users) in assessing the amounts, timing, and uncertainty of future cash flows such as dividends or interest payments.” Generally Accepted Accounting Principles (GAAP) require the use of the accrual basis of accounting. Explain the difference between the accrual basis and the cash basis of accounting and why GAAP requires the accrual basis.

Please include a scholarly reference.

There are only two possible states of the economy. State 1 has a 43% chance of occurring. In State 1, Asset A returns 9.50% and Asset B returns 12.50%. In State 2, Asset A returns -4.80% and Asset B returns -7.80%. A portfolio of just these two assets is invested 67% in Asset A (with Asset B comprising the remainder without any negative weights). What is the standard deviation of the portfolio's returns?
options: 7.66%
7.86%
8.06%
8.26%
8.46%

There are only two possible states of the economy. State 1 has a 73% chance of occurring. In State 1, Asset A returns 5.75% and Asset B returns 8.75%. In State 2, Asset A returns -3.30% and Asset B returns -6.30%. A portfolio of just these two assets is invested 37% in Asset A (with Asset B comprising the remainder without any negative weights). What is the standard deviation of the portfolio's returns?

Question 5 options:

There are only two possible states of the economy. State 1 has a 63% chance of occurring. In State 1, Asset A returns 7.00% and Asset B returns 10.00%. In State 2, Asset A returns -3.80% and Asset B returns -6.80%. A portfolio of just these two assets is invested 47% in Asset A (with Asset B comprising the remainder without any negative weights). What is the standard deviation of the portfolio's returns?

There are only two possible states of the economy. State 1 has a 65% chance of occurring. In State 1, Asset A returns 6.75% and Asset B returns 9.75%. In State 2, Asset A returns -3.70% and Asset B returns -6.70%. A portfolio of just these two assets is invested 45% in Asset A (with Asset B comprising the remainder without any negative weights). What is the standard deviation of the portfolio's returns?

The geographical principle of nearness states that everything is related to everything else but near things are more related than distant things. In your own lives and experience, does this principle seem accurate? What other geographical concepts can you use to support or challenge the principle of nearness, and to describe your own social, economic, political, etc., connections and interactions?
write 200 words.

1. In one year the economy could be in one of three possible states: bust, normal, or boom with corresponding probabilities of 0.25, 0.5 and 0.25. The returns on a common stock A and the market portfolio M conditional on the state of the economy are presented in the table below. Assuming CAPM holds in the economy, calculate the market risk premium over the period.

We know the following expected returns for stocks A and B, given different states of the economy:

Note: If you can, it is much faster to solve these problems in a spreadsheet. However, the answer cannot be had simply by using the built-in AVERAGE() or STDEV() functions. If you are somewhat familiar with Excel, you might look into the SUMPRODUCT() function which is widely used to calculate weighted sums.

A: What is the expected return for stock A? 3+ Decimals

B: What is the expected return for stock B? 3+ Decimals

C:What is the standard deviation of returns for stock A? 3+ Decimals

D: What is the standard deviation of returns for stock B? 4+3+ Decimals