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4 years ago

Security A has a higher standard deviation of returns than Security B. We would expect that ______.

Business

1 answer:

EastWind [94]4 years ago

7 0

Answer:

Only statement 2 is correct as the likely range of returns of security A would be higher as it has a higher standard deviation which means that its returns deviate more from the mean than security B, which implies that the range of returns of security A is likely to be higher than the range of return on security B.

Statement 1 is wrong because a security has higher risk premium when it has a higher Beta, which means that when the standard deviation is linked to the market returns than it may have a higher risk premium, but just on the basis of standard deviation we can not make that decision.

Statement 3 is wrong because we do not know the risk premiums of both the stocks so we cannot calculate the sharpe ratio as is calculated by dividing the excess returns by the standard deviations of stocks.

Explanation:

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Consider a situation in which Alice and Bob are deciding how to share a plot of land for industrial purposes. The total size of

Mnenie [13.5K]

Answer:

2. Alice's payoff from her share of the land is A and Bob's payoff from his share of the land is B.

Explanation:

A payoff matrix could help Alice and Bob in deciding how to share the land. This matrix assigns payoff values to different states of nature. We begin by stating that Alice's payoff from her share of the land is A and Bob's payoff from his share of the land is B, after which payoff values in measurements of the land are assigned to them.

5 0

3 years ago

A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8.0%. (Do not round

wlad13 [49]

Answer:

Bond face value $1.000

Semiannual coupon payments

Coupon rate 8%

a. What is the yield to maturity if the bond is selling for $970?

Yield to maturity 8.27%

If you buy this bond today, you will earn 8.27% per year.

b. What is the yield to maturity if the bond is selling for $1,000?

Yield to maturity 8.00%

If you buy this bond today, you will earn 8.00% per year.

c. What is the yield to maturity if the bond is selling for $1,130?

Yield to maturity 6.96%

If you buy this bond today, you will earn 6.96% per year.

3 0

3 years ago

Self minus Defense Schools, Inc. is authorized to issue 200,000 shares of $2 par common stock. The company issued 73,000 shar

Ivanshal [37]

Answer: Please see answer in explanation column

Explanation:

Number of outstanding shares =73,000

Stock Dividend declared % 14%

Market value per share $7

a) journal entry to record the declaration of stock dividend

Account Debit Credit

Stock dividend $71,540

Commo9n stock divo9dend redistributable $20,440

Paid in capital in excess of par

($71,540 - $20,440) $51,100

Calculations

Stock dividend = 73,000 x 14% x $7=$71,540

Common stock dividend redistributable =73,000 X 14% X $2=$20,440

b) journal entry to record the distribution of stock dividend

Account Debit Credit

Common stock dividend redistributable $20,440

Common stock $20,440

Calculation= Common stock dividend redistributable =73,000 X 14% X $2=$20,440

c) journal entry to record the declaration of cash dividend

Account Debit Credit

Cash dividend $58,254

Dividend payable - common stock $58,254

Calculations

Cash dividend= Numberof shares outstanding×Cash dividend per share

=[73, 000 shares+(73,000 shares×14%)]×$0.70 each

=[73,000 shares+ 10,220 shares]×$0.70 each

=83,220 shares×$0.70 each

= $58,254

d)journal entry to record the payment of cash dividend

Account Debit Credit

Dividend payable - common stock $58,254

Cash dividend $58,254

8 0

3 years ago

Pursuant to the video, if the news reporter had challenged the reasonableness of her detention by the Coach store, Coach could

lawyer [7]

Shopkeeper's privilege is a law in some parts of the US in which a shopkeeper is allowed to detain a suspected shoplifter on store property for a reasonable period of time, so long as the shopkeeper has cause to believe that the person detained in fact committed, or attempted to commit, theft of store property

5 0

3 years ago

Windsor, Inc. reported net income of $200,980 for 2022. Windsor, Inc. also reported depreciation expense of $34,880 and a loss o

ozzi

Answer:

$238,840

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $200,980

Adjustment made:

Add : Depreciation expense $34,880

Add: Loss n the disposal of plant assets $4,630

Less: Increase in accounts receivable -$14,040

Add: Increase in accounts payable $16,780

Less: Increase in prepaid expense -$4,390

Total of Adjustments $37,860

Net Cash flow from Operating activities $238,840

8 0

3 years ago