1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Andrej [43]
2 years ago
11

Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 4.5%, and the market is in equilib

rium. (That is, required returns equal expected returns.) What is the market risk premium (rM - rRF)
Business
1 answer:
seraphim [82]2 years ago
3 0

The market risk premium of Fund P will be 5.5%.

<h3>How to calculate the market risk premium?</h3>

It should be noted that as per CAPM, the return in stock will be:

= Risk free rate + Beta × Market risk premium

8.90% = 4.5% + 0.8 × Market risk premium.

Market risk premium = 5.5%

In conclusion, the market risk premium of Fund P will be 5.5%.

Learn more about market risk premium on:

brainly.com/question/17135853

You might be interested in
The statement of partners' equity shows each partner's beginning capital balance, additional investments, allocated income or lo
zloy xaker [14]

The statement of partners' equity shows each partner's beginning capital balance, additional investments, allocated income or loss, partners'  withdrawals(expenses, withdrawals), and ending capital balance.

<h3>What is capital balance?</h3>

Capital Balance refers to the principal balance of a Loan at any point in time to which the Servicer applies the relevant interest rate at which interest on that Loan accrues.

Simply add up the company's total current assets and subtract the total current liabilities from that total. The result is the amount of working capital available to the company at that time.

The capital balance is the amount borrowed less the future interest rate paid in monthly installments. It is the sum you must pay if you want to settle the contract.

To know more about capital balance follow the link:

brainly.com/question/18804634

#SPJ4

8 0
2 years ago
Assume that Clampett, Incorporated, has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of interest income, and $40,0
liubo4ka [24]

Answer:

$21,000

Explanation:

Calculation to determine Clampett, Incorporated's excess net passive income tax

Using this formula

Excess net passive income tax = ( Interest income + Dividends ) × Tax rate

Let plug in the formula

Excess net passive income tax = ( $60,000 + $40,000 ) × 0.21

Excess net passive income tax = $21,000

Therefore Clampett, Incorporated's excess net passive income tax will be $21,000

4 0
3 years ago
Suppose we want to estimate household size, where a “household” is defined as people living together in the same dwelling, and s
icang [17]
Asking the elementary students how big their family size is should give a fairly good picture of how many people live under the same roof for their family. Since it is for elementary students chances are that most of the child's siblings would still be at home, though some could be college age and not live at home anymore. Also, though  with the high divorce rate that has been evident at least in the 80's and 90's in North America, some members of the family ie fathers or mothers and some siblings may live in another household. 
5 0
4 years ago
a customer sells short 100 shares of PDQ at $28 as the initial transaction in a new margin account. Subsequently, PDQ declines t
sergiy2304 [10]

Answer:$500

Explanation:

Sell short means ,borrowing shares of a company that the buyer speculates will fall in value at a later date

Change in equity 100(28-23)=100×5=$500

4 0
3 years ago
Two investment centers at a large corporation have the following current-year income and asset data:  Investment Center A Invest
Sergio039 [100]

Answer:

26.923%

Explanation:

Return on Investment

\frac{return}{investment}

Center B

return 525,000

investment 1,950,000

ROI 525,000 / 1,950,000 = 0,26923076923 = 26.923%

Is metric is used to determinatethe efficiency of the assets. It compares the generated amount with the investment account.

The investment yields 26.923% of the principal

8 0
3 years ago
Other questions:
  • The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:
    10·1 answer
  • Bankruptcy filings are given names according to
    10·1 answer
  • There is _____ to say that a company's socially responsible actions significantly hurt its long-term economic performance.
    14·1 answer
  • Sarah owns a property and liability insurance agency. She is authorized to represent several insurance companies and she is comp
    12·1 answer
  • The Fisher Company will produce 50,000 10-gallon aquariums next year. Variable costs will equal 40% of dollar sales, while fixed
    6·1 answer
  • Skills include all of the following:
    8·2 answers
  • Linda, the human relations manager, is having lunch with Kellyanne, who will be leaving to manage the company office in Hiroshim
    12·1 answer
  • i. Examine the current process design of that product or service in alliance with the 4 vs model and illustrate the operational
    13·1 answer
  • John House has taken a 20-year, $250,000 mortgage on his house at an interest rate of 6 percent per year. What is the remaining
    8·1 answer
  • As of March 2019, more than half of the money supply (M1) was in the form of Multiple Choice currency. checkable deposits. gold
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!