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3 years ago

HURRY HURRY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Business

2 answers:

vlada-n [284]3 years ago

6 0

The answer would be C.

NNADVOKAT [17]3 years ago

5 0

I think maybe A, hope it helps!

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The market price of a security is $25. Its expected rate of return is 12%. The risk-free rate is 4% and the market risk premium

Mama L [17]

Given Information:

Market price of security = $25

Expected rate = 12%

Risk-free rate = 4%

Market risk premium = 6%

Answer:

New market price of security = $15.03

Explanation:

The new market price of security can be calculated by,

P = Dividend/Expected return

Where Dividend is given by

Dividend = Market price*Expected rate

D = $25*0.12

D = 3$

Expected return is given by

Expected return = Risk-free rate + β*(market risk premium)

β can be calculated as

β = (Expected rate - Risk-free rate)/market risk premium

β = (12 - 4)/6

β = 1.33%

Since it is given that correlation coefficient with the market portfolio doubles, therefore, β will get doubled too because they are directly proportional.

β = 2*1.33%

β = 2.66%

So the Expected return is

Expected return = 4 + 2.66*(6)

Expected return = 19.96%

So the new market price of security is,

P = Dividend/Expected return

P = 3/0.1996

P = $15.03

4 0

3 years ago

Who on here can drive and lives in Florida?

iragen [17]

Answer: aye im 15 i can drive and no i dont live in florida

Explanation:

8 0

3 years ago

In 1971, under president richard nixon, the federal government passed legislation that "froze" wages and the prices of consumer

kicyunya [14]

The idea behind Nixon's decision to "freeze" wages and prices was inflation affects wages and prices, so freezing those would halt inflation.

When the total demand (AD) exceeds the total supply (AS) of a given item or service in the market, this is referred to as inflation.

As a result, the cost of those goods and services rises. This occurs as a result of people having money, either through high government spending or from high incomes or low loan rates.

Nixon thus decides to maintain a specific level of prices and salaries in order to freeze employment. As a result, the population's purchasing power will be constrained, and prices will eventually balance out.

Read more about Inflation:

brainly.com/question/13865168

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4 0

2 years ago

Read 2 more answers

When scheduling appointments, it's necessary to schedule adequate time to ensure an appropriate

swat32

Answer:

a full schedule

Explanation:

the answe

3 0

3 years ago

Applying Excel: Exercise (Part 2 of 2)

Vilka [71]

Answer:

ROI 15%

Residual Income $1,350,000

Explanation:

Residual Income is the difference between net income of the company and the required rate of return. It determines the excess of income generate than the minimum return. The formula to calculate the residual income is,

RI = Net operating Income - (Required rate of return * Cost of operating assets)

RI = $4,500,000 - (21% * $15,000,000 )

RI = $1,350,000

ROI = $\frac{Net Operating Income}{Capital Employed}$

Capital Employed = Sales - Average operating assets

ROI = 15%

Residual income is positive when the department has meet the minimum return requirement. Minimum return is the return that is required by the company stakeholders. The particular projects and activities are selected on the basis of residual income.

8 0

4 years ago