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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:

brainly.com/question/28208903

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What is a type of tort?

fomenos

Answer:

There are 3 main types of tort; intentional tort, negligence tort and strict liability

Explanation:

By definition, a tort is a civil offense against another person. The victim who suffers in that offense can sue for damages, get represented by a lawyer and receive a compensation. There are 3 main types of tort; intentional tort, negligence tort and strict liability. Tort laws are followed when making a decision whether to hold a person legally responsible for the breach against another, and the type of compensation the injured party receives.An intentional tort for example is a civil offense committed when a person engages in intentional conduct that results in damages to another.

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3 years ago

You are an accountant working for Hotel Co. Your supervisor has asked you to research what amount of revenue Hotel Co. should re

Sonja [21]

Answer:

Hotel Co. should record the gross transaction fee and not only the net amount it receives from Expedia.

Explanation:

The revenue that Hotel Co. should account for in its books includes the gross transaction fee, while the collection expense that is withheld by Expedia is recorded as an expense or cost. This method ensures that the revenue due to the Hotel Co. is actually accounted for while the collection expense by Expedia is also separately accounted for. This will enable comparison with another hotel that does not use Expedia for its collection, for example.

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3 years ago

On March 1, 2015, Landon Company acquired real estate on which it planned to construct a small office building. The company paid

Murljashka [212]

Answer:

The amount to be reported as the cost of the land is $101,000

Explanation:

Given information

Paid cash - $90,000

Cost of property $7,600

Salvaged materials - $1,700

Attorney's fee for work concerning the land purchase - $1,100

Real estate broker's fee - $4,000

Architect's fee - $7,800

Put in driveways and a parking lot - $14,000

For computing the amount of the cost of the land, the Architect's fee and Put in driveways and a parking lot is not considered as it is not related to the land expenses. The computation is shown below

= Cash amount + Cost of property - Salvaged materials + Attorney's fee + Real estate broker's fee

= $90,000 + $7,600 - $1,700 + $1,100 + $4,000

= $101,000

Thus, the amount to be reported as the cost of the land is $101,000

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3 years ago

You write one MBI July 139 call contract (equaling 100 shares) for a premium of $17. You hold the option until the expiration da

Bogdan [553]

Answer:

$600 loss

Explanation:

A call option is defined as a contract that exists between ba buyer and seller of a call option to exchange securities held at a particular price within a specific period.

To calculate the profit realised on the investment

Profit from call option= (150- 139) * 100

Profit from call option= $1,100

Profit from premium= 17 * 100

Profit from premium= $1,700

Profit on investment= Profit from call option - Profit from premium

Profit on investment = 1,100 - 1,700 = -$600

So there is a loss of $600

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3 years ago

Read 2 more answers

QS 9-9 Recording warranty repairs LO P4 On September 1, Home Store sells a mower (that costs $220) for $520 cash with a one-year

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Answer and Explanation:

The journal entries are shown below:

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(Being the sale is recorded)

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To Merchandise inventory $220

(Being the cost is recorded)

On September 1

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To Estimated warranty liability $41.60

(Being the warranty expense is recorded)

On July 24

Estimated warranty liability $36

To Repair parts inventory $36

(Being the estimated warranty liability is recorded)

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3 years ago