Answer:
The expected return on security with a beta of 0.8 is closest to 7.2%.
Explanation:
This can be determined as follows:
Since the return of security Z remains at 4% despite the change in the market, security Z is the risk-free asset.
Note that a risk free asset is an asset which its returns does not change with change in the market.
Using the Capital Asset Pricing Model (CAPM) formula, we have:
Er = Rf + (B * MPR) ............................................ (1)
Where;
ER = Expected return = ?
Rf = Risk-free rate = Rate of return of security z = 4%
B = Beta = 0.8
MPR = Market risk premium = Expected return on the market rate - Risk-free rate
Expected return on the market rate = (50% * 24%) + (50% *(-8%)) = 8%
Therefore, we have:
MPR = 8% - 4% = 4%
Substituting the values into equation (1), we have
Er = 4% + (0.8 * 4%)
Er = 0.072, or 7.2%
Therefore, the expected return on security with a beta of 0.8 is closest to 7.2%.
The mutual benefit that the American Clothing Company derives by partnering with a Chinese Manufacturer comes because <u>E. It is</u> an example of counter-trading ...
<h3>What is Counter-trading?</h3>
Counter-trading occurs when goods or services are exchanged for other goods or services rather than for hard currency. It is a reciprocal form of international trade in which, for example, the American Clothing Company brings in its technology while the Chinese Manufacturer provides cheap labor and other resources.
<h3>Answer Options:</h3>
A. It is a strategic alliance in which two countries share the risks and rewards of starting a new enterprise together in a foreign country.
B. It is a wholly owned subsidiary in which a foreign subsidiary is totally owned and controlled by an organization.
C. It is a greenfield venture in which owning the organization has been built from scratch.
D. It is an example of a franchise in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company’s brand name and a package of materials and services.
E. It is an example of counter-trading in which the country is bartering for goods.
Thus, the counter-trade between these companies is mutually beneficial because of <u>Option E</u>.
Learn more about counter-trading at brainly.com/question/14659049
Answer:
$20,000
Explanation:
Calculation for the liability that should be reported for vacation pay
Using this formula
Liability=Vacation weeks*Compensation averaged per week for Year 1
Let plug in the formula
Liability=20 weeks × $1,000 per week
Liability = $20,000
Therefore the amount of liability that should be reported for vacation pay will be $20,000
Answer:
trade can make everyone better off.
Explanation:
The aim of trade is to make all parties involved better off than they were before the trade occured. For example in international trade a country sells items they have reduced cost producing, while they buy items that will be expensive for them to produce.
In this instance the web startup is offering to give the accounting firm a service they have (web hosting) for tax return service.
Everyone is better off at the end of the day because they obtained a service they could not perform alone.
