1. Javier Mahon's tax-advantaged retirement plan is wholly invested in equities assets. Due to the poor performance of his portfolio's overseas component in the past, he has cut his foreign equity exposure to 2%. Mahon's financial advisor has suggested increasing his exposure to overseas equities. Mahon reacts as follows: a. Due to their poor performance in the past, I intend to sell all of my remaining foreign equity assets soon their market values reach their original purchase price. c. Over the last five years, the majority of diverse overseas portfolios have delivered unsatisfactory returns. However, throughout that period, the market in Country XYZ surpassed all other markets, including our own. If I do decide to grow my overseas investment risk, I would like that it be entirely comprised of stocks from Country XYZ. c. International investments are by definition riskier. As a result, I choose to invest in foreign equities assets via my "speculative" account, which provides me with the greatest opportunity to become wealthy. I don't want these them in my retirement fund, which is supposed to safeguard me from destitution in old life. Mahon's advisor is conversant with behavioral finance principles but favors a more traditional or conventional approach to investing (current portfolio theory). In each of his three statements, Travis Lewis paid his first appointment to the controller's board room after being hired in May as a senior accountant. Because he had been ordered to provide his position paper on year-end revisions, Lewis assumed he had prepared the report incorrectly. Lewis's initial surprise was that he had not. His second surprise came in the form of his boss's demand to revise one of the projected charges. ABB was a new startup focused on industrial plastic fasteners. Each product comes with a comprehensive long-term guarantee against manufacturer's faults. "Don't you believe 4% of revenues is a bit excessive for our estimated warranty expense?" his supervisor said. "After all, this is our first time. We have little expertise with new product launches. I've just hung up with Gustavo (ceo) He believes that given the projected earnings, we will have difficulty extending our credit line. The heat is on." 1.Should Lewis heed his boss's advice? 2.Is it moral to revise the warranty estimate? 3.Who would be impacted if the recommendation is implemented? Following researching about three successful dealers in The Wall Street Journal, you come to the conclusion that active investment will likewise give you with better trading outcomes than passive investment. What kind of a behavioral propensity are you displaying right now? Grisham Inc. is attempting to design a framework for asset financing. Temporary current assets total $400,000, while permanent current assets total $300,000 for the company. In addition, Grisham has fixed assets of $500,000. Based on the assumption of a 40% tax rate, a. Develop two different alternative finance strategies for Grisham. One of the plans should be cautious, with 75 percent of assets funded by long-term sources, while the other should be aggressive, with just 56.25 percent of assets supported by long-term sources, according to the recommendations. If Grisham's profits before interest and taxes total $200,000, calculate the profits after taxes for each of your choices based on the $200,000 figure. The short- and long-term interest rates were reversed, what would be the result