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schepotkina [342]
3 years ago
12

Stock r has a beta of 1.5, stock s has a beta of 0.75, the expected rate of return on an average stock is 13%, and the risk-free

rate is 7%. by how much does the required return on the riskier stock exceed that on the less risky stock? answer
Business
1 answer:
masha68 [24]3 years ago
6 0

Answer:

4.5%

Explanation:

The formula to compute the expected rate of return under the CAPM model is shown below:

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)      

For stock r, the required rate of return is

= 7% + 1.5× (13% - 7%)

= 7% + 1.5 × 6%

= 16%

For stock s, the required rate of return is

= 7% + 0.75× (13% - 7%)

= 7% + 0.75 × 6%

= 11.5%

So, the difference of required rate of return is

= 16% - 11.5%

= 4.5%

The Stock R has high riskier stock whereas the stock S has less riskier stock due to beta

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Staples promises an excellent online shopping experience, free delivery for purchases over $49.97, buy-online-collect in store,
Vanyuwa [196]

Answer:

b. a market penetration strategy

Explanation:

Market penetration means that it offered a greater products range at the lower price in order to outplayed the competitors and the customers for purchasing the product from the new company

Since in the given situation, it is mentioned that the free delivery is to be provided when purchase is more than $49.97 also the wider range is available

So the option b is correct

3 0
2 years ago
HELP! 20 POINTS!!!
Bingel [31]

The answer is D.)She would likely have to pay more than $55 at the time of purchase for the convenience of using her credit card.

There are always fees for using any type of credit card. Interests or not, you pay fees for the government. Lynn can pay even more if she doesn't pay the balance by the end of the month. Every time she uses the credit card, her balance fees rises. By the time she gets enough money to pay of the balance, her balance will be much bigger.

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8 0
3 years ago
Read 2 more answers
Joshua needed money for some unexpected expenses, so he borrowed $5,355.26 from a friend and agreed to repay the loan in seven e
konstantin123 [22]

Answer:

10%

25.14 years

Explanation:

A financial calculator can be used to solve these problems

PMT = $-1,100

PV = $5,355.26

FV = 0

N = 7

Compute I = 10%

PMT = $-25,000

FV =  $1,387,311

I = 6%

PV = 0

Compute N = 25.14 years

8 0
3 years ago
(C____________ ) among buyers and sellers prohibits a single buyer or seller can dictate the price of a product or resource beca
Sergeu [11.5K]

Answer:

(Competion____________ ) among buyers and sellers prohibits a single buyer or seller can dictate the price of a product or resource because others can undercut that price. The regulatory mechanism of the market system is ( competition___________ ). As the result, the ( _economic_________ ___power_____ ) is widely distributed. In other words, competition diffuses ( __economic________ ___power______ ) and limits the actions of any single seller or buyer.

Explanation:

Economic power refers to the ability of countries, businesses, or individuals to improve their standard of living, making decisions that benefit themselves alone, and reducing the ability of any outside force to reduce their freedom.  Competition refers to the selling and buying of goods and services with others, who are also selling and buying the same goods and services.  It balances economic power, preventing a single individual from monopolizing the market interaction.

6 0
3 years ago
Fosnight Enterprises prepared the following sales budget: The expected gross profit rate is 30% and the inventory at the end of
Travka [436]

Answer:

$1,960

Explanation:

Complete Questin:

Fosnight Enterprises prepared the following sales budget:

Month Budgeted Sales

March $6,000

April $13,000

May $12,000

June $14,000

The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?

Sales = 100% – 30%

Gross Profit = 70%

Cost of Goods Sold (CGS)

Therefore, June Sales= $14,000 × 70%

= 9,800 (CGS) × 20%

= $1,960

8 0
3 years ago
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