What must be the beta of a portfolio with e(rp) = 13.75%, if rf = 6% and e(rm) = 11%? (round your answer to 2 decimal places.) b
1 answer:
Answer:
beta of portfolio is 1.55
Explanation:
First we calculate the Equity Risk Premium, given as:
Equity Risk Premium = Market Return - Risk Free Rate
= 11 - 6 = 5%
Given that;
Risk Free Rate = 6%
Return on Stock = 13.75%
Second, we calculate the Return on Stock
Return on stock = Risk-free rate + Equity risk premium * Beta for stock
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Answer:
Option (B) is correct.
Explanation:
Equivalent units of production(EUP) - Materials:
= Transferred out + Ending balance
= 10,451 units × 100% + 3,483 units × 100%
= 10,451 + 3,483
= 13,934
Equivalent units of production(EUP) - conversion:
= Transferred out + Ending balance
= 10,451 units × 100% + 3,483 units × 36%
= 10,451 + 1,253.88
= 11,704.88
Material cost =
Material cost =
= 73,157
Conversion cost =
Conversion cost =
Conversion cost =
= 53,715
Therefore,
Total cost of units completed during the period(10,451 units):
= Material cost + Conversion cost
= 73,157 + 53,715
= 126,872