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Levart [38]
2 years ago
13

The market price of a security is $50. Its expected rate of return is 14%. The risk-free rate is 6%, and the market risk premium

is 8.5%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)
Business
1 answer:
MatroZZZ [7]2 years ago
7 0

The market price of a security is $50. Its expected rate of return is 14%, and the market price of the security  is mathematically given as

MR=27.368

<h3>What will be the market price of the security if its correlation coefficient with the market portfolio doubles?</h3>

Generally, the equation for expected rate return is mathematically given as

RR=(Rf+beta*(Rm-Rf)

Therefore

RR=(Rf+beta*(Rm-Rf)

Beta= (13-7)/8

Beta=0.75

In conclusion, the market price of a security

MR=DPs/RR

Where

Po=DPS/RR'

DPS=40*0.13

DPS=$5.23

and

RR=&+1.5*8

RR=19%

Hence

MR=$5.23/0.19

MR=27.368

Read more about market price

brainly.com/question/17205622

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3 years ago
The _______________ was the center of the typical Roman town or city. a. aqueduct b. rostrum c. forum d. amphitheater
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4 years ago
Describe how organizational culture is related to project management. What type of culture promotes a strong project environment
Rzqust [24]

Answer:

1) The culture of the organization and its connection with project management will help businesses determine the exact projects are worth pursuing.

2)

-The overall tone of the work experience

- Meetings, mission statements and expectations

- Motivation and reward systems

- Reflections on leadership and authority relations

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- Rules of conduct

- Ecological factors

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- Risk tolerance

Explanation:

The culture of an organization can be linked to projects in many areas, as  processes, management style, time management, and success rate in training. Organizational culture may be described as the values ​​and behaviors of a company employees. Such features or factors play an important role in determining whether the project has achieved its objectives. These factors:

-The overall tone of the work experience

- Meetings, mission statements and expectations

- Motivation and reward systems

- Reflections on leadership and authority relations

- Business ethics

- Rules of conduct

- Ecological factors

- Social norms

- Risk tolerance

Get determined the culture of the organization and its connection with project management will help businesses determine the exact projects are worth pursuing. By placing project management thinking in an organizational culture, firms can provide long-term benefits in a competitive environment. Here are some key to creating a culture that includes project management:

- Understand the value of project management;

- participation of project sponsors at the implementation stage;

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6 0
4 years ago
Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2021: Co
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Answer:

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Explanation:

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Beginning inventory   $250,000    $286,000  

Add Purchases            $672,000   $888,000  

Freight-in                      $14,000

Net markup                                      $26,000  

Total                              $936,000   $1,200,000

Less: Net markdowns                       $4,500

Goods available for sale                   $1,195,000  

Cost-to-retail percentage                  0.78 (in working note)

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Retail Estimated ending

inventory                                            $335,500  ($1,195,000 - $860,000)

At cost Estimated ending

inventory                           $261,690

Cost-to-retail percentage is

= 936,000 ÷ 1,200,000

= 0.78

Estimated ending inventory at cost is

335,500 × 0.78

= 261,690

7 0
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rewona [7]

Answer:

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If money supply is fixed, price is directly proportional to velocity.

If price fell, then velocity also fell.

V fell and Y rose

3 0
3 years ago
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