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Licemer1 [7]
3 years ago
7

Suppose that two factors have been identified for the U.S. economy: the growth rate of industrial production, IP, and the inflat

ion rate, IR. IP is expected to be 4%, and IR 2.0%. A stock with a beta of 2.5 on IP and 1.8 on IR currently is expected to provide a rate of return of 12%. If industrial production actually grows by 6%, while the inflation rate turns out to be 5.5%, what is your revised estimate of the expected rate of return on the stock
Business
1 answer:
DENIUS [597]3 years ago
5 0

Answer:

23.3%

Explanation:

Expected return refers to the anticipated profit or loss of financial investment. Essentially, it's the value of the return that investors anticipate. We can find the expected return by using the formula given below

Δ IR = 5-5% - 2% = 3.5%

Δ IP = 6% - 4% = 2%

Formula

Expected return = Expectedreturn(previous year) + (betaIP x Δ IP) + (betaIR x Δ IR)

Expected return = 12% + (2.5 x 2%) + (1.8 x 3.5%)

Expected return = 23.3%

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Base on the scenario been described in the question, repayment of liabilities is treated as a cash distribution. Esther's share of the debt reduction is Since this amount is lower than her outside basis ($40,000) she does not recognize a gain or loss.reduces her outside basis by the $25,000, which leaves her $15,000 of outside basis in EE afterthe debt repayment.

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Answer:

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Explanation:

Marginal Cost is the change in total cost as a result of producing one extra unit of output.

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Total cost is the sum of fixed and variable cost. average total cost is total cost / quantity produced.

If the price of supplies increase, the cost of production increases and average total cost, average variable cost and marginal cost would increase.

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If Young Explorers realizes that Gabby reacts better to social media than traditional marketing methods because of the ability t
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The correct answer is c. Time to delivery .

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