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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

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. Based on the following data, Accounts payable…………………………………………………..... $62,000 Accounts receivable…………………………………………………. 100,000
Temka [501]

Answer:  $428,000

Explanation:

Given that,

Accounts payable = $62,000

Accounts receivable = 100,000

Cash = 30,000

Inventory = 138,000

Land = 160,000

Common Stock = 200,000

Revenue = 80,000

Dividends = 56,000

Expenses = 40,000

Total assets = Accounts receivable + Cash + Inventory + Land

                     = 100,000 + 30,000 +  138,000 + 160,000

                     = $428,000

3 0
3 years ago
Mike Karanikolas wants to enter the French market with his usual strategy of using influencers. Two influencers are considered t
ratelena [41]

Answer:

A) Based on NPV, Mike will choose 2nd influencer.

B) Based on IRR, Mike will choose 2nd influencer.

Explanation:

See images to get the appropriate answer:

3 0
3 years ago
Marsha’s Pet Store employs six employees. Their duties are to sell pets, replenish the stock, keep the pets’ cages clean, feed t
Gemiola [76]

Answer: True.

Explanation:

People sometimes have a tendency of doing only what they are told to do or only what they are paid for. This is why most people who progress in a company do so on the basis of having done work that was not in their description, but would have helped the company progress.

It would appear that Marsha's 6 employees are all of the caliber of employees who just do what they are told and nothing more.

For this reason therefore, she would include a stipulation changing the scheme to include careful performance of the other duties before any sales commission can be earned. This way they'll start to do those other things since they are now paid to do so.

8 0
3 years ago
How do organizations calculate various costs, and what do these calculations mean to business?
QveST [7]

Answer:

See the explanation section

Explanation:

Organizations calculate various costs with the help of the weighted average cost of capital. It is a significant cost measurement system through which organizations can calculate the cost of debt after tax, cost of new equities, cost of existing equities, and cost of preferred shares. WACC can be a benchmark for the organization. A firm needs to know those costs because it can make sure that whether those projects are running smoothly to continue or running worse to reject.

Another significant cost measurement method is the net present value. With the help of NPV, a business can make sure about a project to accept it or reject it.

8 0
3 years ago
A university that promotes itself as a very traditional campus with an old-world look and feel, where the facilities are manicur
svp [43]

Answer:

The correct answer is letter "D": Reliability.

Explanation:

In customer care, the quality dimensions refer to a set of five (5) characteristics companies must pay attention to in implementing their operations to attract customers and ensure their loyalty. Those characteristics are: Reliability, Responsiveness, Assurance, Empathy, and Tangibles.

Reliability refers to providing a service the customers can trust. Most consumers prefer traditional methods than innovative because the first has been proven to work. Then, <em>if a university promotes itself as a very traditional campus with an old-world look and feel, where the facilities are manicured and the dorm rooms are large, it is focusing on the reliability aspect of service quality.</em>

4 0
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