Why might the standard approaches to asset classification become problematic in a knowledge-based economy? Consider the challenges in recording and measuring intellectual capital and human resources. What alternative frameworks could better represent these intangible assets?
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- What are the advantages of using the Dupont System to analyze the Return on Assets?In your own view, how important is asset allocation? Discuss the various strategies of asset allocation.Define and explain the agency problem in terms of differences in ability to diversify risk by finance and human capital. Why does it arise? What are the mechanisms available to ameliorate the agency problem?
- Why investors will rely on nonfinancial statement forms of information to facilitate the efficient allocation of resources?What is meant by asset transformation and how is it the basis for differentiating between indirect finance and direct finance?Why might disinflation prove favorable to financial assets?
- How can we reduce investment risks by asset diversification?The nature of financial services carries three implications for new product development.a) Implications of intangibilityb) Implications of inseparabilityc) Implications of heterogeneityd) All the above.What are the uses and limitations of economic data?