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1 year ago

What would be the expected rate of return for each company, according to the capital asset pricing model (capm)?

Business

1 answer:

VladimirAG [237]1 year ago

4 0

Formula for calculating the expected rate of return according to capital asset pricing model is as follows:

Expected return of the investment = the risk free rate + the beta or we can say it as the risk of the investment * the expected rate of return on the market – the risk free rate , the difference between the two i.e expected rate of return and the risk free rate is known as the market risk premium.

For every additional increment of risk incurred, the expected return should increase propotionately.

If any security is found to give a higher return in relation to the additional risk incurred, then the CAPM model shows that it is a buying opportunity.

Despite shortcomings of the CAPM model , this model is very popular for valuing securities.

To know more about CAPM model here:

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kirill [66]

Answer:

The correct option is

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Explanation:

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3 years ago

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il63 [147K]

Answer:employee support group.

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4 years ago

The price elasticity of demand if the price of a pint falls from $8 to $6 is

melamori03 [73]

It means to say that the demand of the product is decreasing. The relationship between the price and demand is one way. It means to say that if the price increases, the demand is higher. In this scenario, the price increases to avoid shortage on the product. If the price is decreasing, it means to say that the demand is decreasing and can possibly cause surplus on the said product. Lowering the price allows consumers to have higher purchasing power and enticing them to purchase such product.

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3 years ago

1. Bankruptcy law is primarily state law. a. True b. False 2. The government is given the power to establish bankruptcy laws in

exis [7]

Answer:

1. Bankruptcy law is primarily state law. b. False

2. The federal  government is given the power to establish bankruptcy laws in Article I, Section 8 of the  U.S constitution. The purpose of bankruptcy law is to protect the  debtor  by giving him or her a fresh start and to ensure equitable treatment of the creditors.

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3. Bankruptcy proceedings are held in  federal bankrupcy courts.

4. Title 11 of the United States Code contains the Bankruptcy Code.

5. The Bankruptcy Code has several chapters. Chapter 7 provides for liquidation proceedings, Chapter  11 governs reorganizations, and Chapter 13 provides for an adjustment of debts for individuals with regular income.

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3 years ago

The growth-share matrix defines four types of sbus: __________ are low-growth, high-share businesses or products.

mafiozo [28]

The growth-share matrix defines four types of sbus: Cash cows are low-growth, high-share businesses or products.

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They often need heavy investments to finance their zoom. The market rate varies from industry to industry but usually shows a cut-off point of 10% – growth rates more than 10% are considered high, while growth rates below 10% are considered low.

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Growth-share business matrix may be a business tool, which uses relative market share and industry rate of growth factors to guage the potential of business brand portfolio and suggest further investment strategies.

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2 years ago