EB
Answered
Explain why cash will never be adjusted in consolidation journal entries.
On Jun 09, 2024
Cash:
- The text makes the point that one of the rules of consolidation is 'never adjust cash'.
- Although intragroup transactions affect the cash of group members,the group total cash will always equal the sum of the separate cash accounts of group members.
EB
Answered
Is it possible for an asset to have a negative beta? (Hint: yes) What would the expected return on such an asset be? Why?
On May 09, 2024
While it is unlikely to observe a negative beta asset, it would have less systematic risk than the risk-free asset and would be expected to provide an even lower return. One possibility often cited is that of gold. The return would be less than the risk-free rate because, while the risk-free rate is determined by changes in inflation and the business cycle for the economy at large, gold, as an ultimate store of value, is not affected by these factors (at least to the same degree).