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Kaylis [27]
1 year ago
5

American Paper Company has a beta of 1.2. The risk-free rate is 6 percent and the required return on the market is 14 percent. T

he required rate of return on the security is
Business
1 answer:
Lynna [10]1 year ago
3 0

American Paper Company has a beta of 1.2. The risk-free rate is 6 percent and the required return on the market is 14 percent. The required rate of return on the security is:

  • -15.6%
  • -13.2%
  • -22.0%
  • -22.8%

<h3>What Is the Security Market Line?</h3>

The security market line (SML) is a line drawn on a chart that serves as a graphical representation of the capital asset pricing model (CAPM)—which shows different levels of systematic, or market risk, of various marketable securities, plotted against the expected return of the entire market at any given time.

Its Also known as the "characteristic line," the SML is a visualization of the CAPM, where the x-axis of the chart represents risk (in terms of beta), and the y-axis of the chart represents expected return. The market risk premium of a given security is determined by where it is plotted on the chart relative to the SML

The formula for plotting the SML is:

Required return = risk-free rate of return + beta (market return - risk-free rate of return)

Learn more about SML on:

brainly.com/question/15877803

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Individual people within the same department generally assume both a Project and Maintenance skills based on staff, company, or their standards.

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According to the Zippo standard, websites that provide information but do not provide the opportunity to conduct online transact
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Cameron is expected to produce 550 parts per day, but his machine is capable of only 480. He is also expected to supervise six w
Kisachek [45]

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For example, if an employee leaves the company, it may be necessary to temporarily expand the role of another employee to accommodate the absence of the absent employee.

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Learn more about Cameron here: brainly.com/question/2049411

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7 0
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The insured owns an older home with lath and plaster walls. Following a kitchen fire, the insurance company pays to have the wal
Stolb23 [73]

Answer:

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Functional replacement policy is a policy or product of Insurance companies which helps subscribers to be able to replace such items which may have been destroyed by fire or other accidents.

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Monopoly output is _____ the corresponding output for perfectly competitive industries. Please choose the correct answer from th
photoshop1234 [79]

Monopoly output is _the same as (B) ______ the corresponding output for perfectly competitive industries

<h3>Similarity between a monopolistic market and perfectly competitive market </h3>

A monopolistic market is similar to a perfectly competitive market because both markets determine the prices and supply of goods and services in the market. although a perfectly competitive market consists of several firms no particular firm controls the market which makes the group of firms as act as a monopoly.

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